Bank of Korea pushes for bank-led stablecoin control

The central bank argues that existing banking oversight frameworks offer the only reliable path to ensuring financial stability and consumer protection in the volatile digital asset market. To formalize this authority, the Bank of Korea has proposed establishing a statutory policy body tasked with coordinating oversight across various financial regulators and government agencies. This recommendation arrives as South Korea struggles to finalize its Digital Asset Basic Act, a legislative effort repeatedly hampered by disagreements over issuer eligibility and the role of non-bank entities.

While the legislative process falters, the central bank is moving forward with its own infrastructure projects. Plans for the second half of the year include expanding the use of deposit tokens—blockchain-based representations of commercial bank deposits—for government subsidies, public vouchers, and EV charging payments. These initiatives have gained traction following earlier endorsements from officials like Governor Hyun-Song Shin and the Ministry of Economy and Finance, which have already initiated pilot programs for tokenized government spending.

Despite this technical progress, the broader regulatory framework remains in gridlock. Lawmakers are currently divided on whether to restrict stablecoin issuance to banks or permit non-bank firms to participate, a debate further complicated by questions surrounding the regulation of tokenized real-world assets. With the original target for the Digital Asset Basic Act pushed back due to shifting political priorities and broader geopolitical disruptions, the central bank’s insistence on a bank-centric model remains a primary point of contention in Seoul.