South Korea Charts Path for Won-Backed Stablecoins and Forex Reform

The government intends to formalize the status of won-denominated stablecoins under the upcoming Digital Asset Basic Act. This legislation will provide the necessary legal foundation for their issuance and circulation, effectively weaving them into the domestic financial system. Authorities argue that bank-led consortiums should spearhead this transition to leverage existing oversight mechanisms for consumer protection and financial stability.

Simultaneously, the Bank of Korea is scaling its digital infrastructure through CBDC pilots and tokenized government bond projects, including participation in the Bank for International Settlements’ Project Agora. Beyond these digital initiatives, the central bank is expanding its deposit token program, which uses blockchain to facilitate everyday transactions like government subsidies and public utility payments.

To complement these digital shifts, the government is loosening foreign exchange regulations. By establishing an offshore won settlement network, international financial institutions will eventually allow foreign users to hold and transfer the won without needing domestic bank accounts. These changes move the nation away from a system of strict prior approvals toward a post-reporting framework, aiming to align South Korea’s financial system with the global adoption of digital assets.