South Korea Proposes New Bill for Won-Backed Stablecoin Framework
- South Korea introduces a bill for issuing won-backed stablecoin.
- Stablecoin compliance to be overseen by Financial Services Commission.
- Legislation likely aims at stability, avoiding past collapses.
South Korea’s major political factions introduced stablecoin legislation, sparking debate over interest payment plans within the proposed won-backed digital assets framework.
The initiative reflects a strategic response to global regulatory trends, affecting the stablecoin market by prioritizing financial stability and domestic currency prominence.
South Korea announced a legislative proposal on July 23, 2025, to establish a stablecoin regime with the Korean won, as part of its evolving digital currency strategy.
The proposal could reshape South Korea’s digital payment landscape, with significant regulatory implications, potentially influencing market dynamics and financial inclusion strategies.
Ahn Do-geol Leads Won-Backed Stablecoin Initiative
The South Korean government is advancing a legislative framework focused on issuing a won-backed stablecoin. This initiative follows campaign commitments by President Lee Jae-myung to formalize digital currency operations.
Key figures include Ahn Do-geol and Jin Sung-joon, who are instrumental in constructing this framework. The Digital Asset Framework Act supplements this with partial stablecoin regulations. Ahn Do-geol emphasized, “We are committed to establishing a clear operational and legal framework for stablecoin issuance and circulation, ensuring that the Korean won is prioritized in digital payments and settlements.” source
Bank of Korea’s Role in Framework Development
The proposed legislation mandates stablecoin issuers to hold minimum equity capital, adjusting financial entry barriers. This aligns with global regulatory trends, aiming for financial stability.
The collaborative efforts of the Ministry of Economy and Finance and Bank of Korea indicate significant state involvement, projecting an impact on Korea’s financial market infrastructure. Jin Sung-joon highlighted, “MOEF and BOK are actively collaborating on won-pegged stablecoin legislation… underscoring our commitment to regulatory clarity and consumer protection.” source
Lessons from Terra-Luna Inform New Legislation
This proposal follows lessons from the Terra-Luna crisis in 2022, focusing on asset-backed structures to avoid past pitfalls in algorithmic stablecoins.
Looking ahead, South Korea’s stablecoin framework may serve as a model for regulatory practices, paralleling UK’s FCA and US frameworks, promoting financial transparency.
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