The Financial Services Commission will submit the stablecoin bill in October to establish a complete regulatory framework
According to local media (MoneyToday), the Financial Services Commission (FSC) is expected to submit a stablecoin regulatory bill to the National Assembly in October as part of the country's second phase of virtual asset user protection legislation. ruling party member Park Min-kyu stated at a stablecoin-related discussion on Monday that he has received a report from the FSC regarding this plan, and the government bill is expected to be submitted to the National Assembly around October.
The bill will establish related requirements for stablecoin issuance, collateral management, and internal risk control systems. The FSC has been working to develop this framework through its virtual asset committee since 2023, aiming to set clearer rules for domestic cryptocurrency service providers.
The president promises to establish a Korean won stablecoin market, and the four major banks will meet with Circle
Newly elected President Lee Jae-myung promised during his campaign to establish an active local currency-linked stablecoin market to strengthen monetary sovereignty in the digital financial era. This move has received a positive response from the industry, with local banks and payment companies applying for stablecoin trademarks and preparing to use digital currency-related services.
South Korea's four major banks: KB Kookmin, Woori, Shinhan, and Hana are reviewing a potential meeting with Circle president Heath Tarbert, who will visit Korea next week. These banks are actively preparing for the issuance of a Korean won-linked stablecoin, which is expected to be launched by the end of 2025 or early 2026.
The central bank maintains a cautious attitude, emphasizing a bank-led issuance model
Although the government is actively promoting the development of a Korean won stablecoin, the Bank of Korea has made several cautious comments regarding the potential risks of a Korean won-linked stablecoin market.
The president of the Bank of Korea, Lee Chang-yong, stated last month that the issuance of a Korean won stablecoin should be limited to licensed banking institutions, as irresponsibly approving multiple stablecoins could undermine the country’s strict foreign exchange policy.
The deputy governor of the central bank, Yoo Sang-dae, stated, 'It is desirable to first allow highly-regulated banks to issue Korean won-based stablecoins, and then gradually expand functionality to the non-bank sector based on experience.'
The Bank of Korea has slowed down its central bank digital currency (CBDC) project, pausing the pilot program originally scheduled for the end of 2025, and is now supporting a 'bank-first' stablecoin model.
Further reading
Lee Jae-myung supports the Korean won stablecoin! Korea's CBDC experiment has been halted, is stablecoin better than CBDC?
Global competition intensifies the legislative process to reduce reliance on dollar stablecoins
This legislative effort is a response to former U.S. President Trump's mission to strengthen the dollar's global hegemony through stablecoins. Last month, Trump signed the GENIUS Act, creating a federal regulatory framework for stablecoins. Neighboring Japan is also about to launch its first yen-denominated stablecoin, with local fintech company JPYC expecting to receive issuance approval as early as this fall.
According to data from the Real-World Asset Tokenization Tracker RWA.xyz, the total market value of stablecoins is $266.7 billion, with dollar-linked stablecoins continuing to dominate 99.8% of the market at $266.3 billion.
Source: RWA.xyz The total market value of stablecoins is $266.7 billion
Local industry stakeholders say there is an urgent need to introduce a Korean won-linked stablecoin to reduce reliance on dollar-based stablecoin tokens. The Korean won is the second largest fiat currency for cryptocurrency trading globally, with a trading volume of $663 billion year-to-date, accounting for about 30% of global fiat cryptocurrency activity.
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This content is compiled by Crypto Agent from various sources, reviewed and edited by Cryptocurrency City. It is still in the training phase and may contain logical biases or information errors. The content is for reference only and should not be considered investment advice.
This article titled 'The South Korean President convenes the four major banks to discuss the Korean won stablecoin with Circle, aiming for the passage of the October bill' was first published in 'Cryptocurrency City'
