Key Takeaways
South Korea plans to legalize local stablecoin issuance under the new Digital Asset Basic Act.
President Lee’s crypto push faces opposition from the Bank of Korea over monetary policy concerns.
South Korea is taking a major step toward becoming a leader in digital finance, as newly elected President Lee Jae-myung’s administration moves to legalize domestic stablecoins. The ruling Democratic Party has introduced the Digital Asset Basic Act, a crypto bill aimed at promoting transparency, regulating local stablecoin issuance, and boosting competition in the country’s thriving crypto sector.
Local Stablecoin Issuance and Regulatory Framework
Under the proposed legislation, local companies will be permitted to issue stablecoins—digital tokens pegged to the South Korean won—if they meet strict regulatory conditions. These include maintaining a minimum equity capital of 500 million won (around $368,000), holding adequate reserves to guarantee redemptions, and securing approval from the Financial Services Commission (FSC).
The bill is timely, as the nation’s appetite for stablecoins continues to grow. According to the Bank of Korea, transactions involving U.S. dollar-based stablecoins reached 57 trillion won ($42 billion) across five major South Korean exchanges in Q1 2025. With over 18 million crypto participants in the country, the new framework is expected to enhance investor protection while encouraging innovation.
Political Momentum and Market Reaction
President Lee, who won a snap election on June 3, is swiftly acting on his campaign promises. In addition to stablecoin reform, he supports allowing the national pension fund to invest in crypto assets and has advocated for the introduction of Bitcoin ETFs. “We need to establish a won-backed stablecoin market to prevent national wealth from leaking overseas,” Lee said during a May policy forum.
However, not everyone is on board. The Bank of Korea remains skeptical, warning that privately issued stablecoins could undermine monetary policy. Governor Rhee Chang-yong has argued that the central bank should oversee the development of any won-pegged tokens to safeguard financial stability.
Also Read: Ripple Partners with BDACS to Secure XRP & RLUSD Custody in South Korea
Despite the debate, South Korea’s crypto stocks are on the rise. KakaoPay, a digital wallet and payments platform, has surged up to 45% over the past five days. Yet analysts like JPMorgan’s Stanley Yang and Jihyun Cho remain cautious, calling the rally “fundamentally unjustifiable” without clear benefits from the legislation.
As South Korea accelerates toward legalizing stablecoins, the world is watching to see whether the country can strike the right balance between innovation and regulatory prudence.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses
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