South Korea to Roll Out Won-Based Stablecoin Law This October

The Financial Services Commission (FSC) is finalizing a bill that could be tabled in parliament as early as October, marking the second stage of the Virtual Asset User Protection Act.

The initiative is expected to bring clarity to how local stablecoins are created and managed, covering everything from issuance rules to collateral safeguards. Lawmakers say the FSC’s proposal will sit alongside several other drafts already in circulation, giving the National Assembly a range of options as it shapes a regulatory blueprint.

Political and Market Momentum Builds

Calls for a domestic stablecoin have grown louder since President Lee Jae-Myung highlighted the idea during his campaign. Supporters argue that a won-pegged asset would reduce dependence on the U.S. dollar and strengthen South Korea’s influence in digital markets. Legislators from across the political spectrum have since introduced bills with varying approaches, including proposals centered on digital asset frameworks and payment innovation.

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The banking sector has not waited on the sidelines. Earlier this summer, eight major lenders announced they were exploring a joint venture to launch a stablecoin tied to the local currency, potentially as soon as early 2026, provided regulations are in place. The country’s four biggest banks are also preparing talks with Circle’s president during his upcoming visit to Seoul, underscoring growing international interest in Korea’s regulatory direction.

Regional Competition Heats Up

The race to issue national stablecoins isn’t limited to Korea. In Japan, fintech firm JPYC is reportedly on track to receive the green light for a yen-backed token before the end of the year. Analysts see the parallel developments in Tokyo and Seoul as part of a broader regional push to create alternatives to dollar-based digital money.

Central Bank Voices Concern

Despite the enthusiasm, South Korea’s central bank has struck a cautious tone. Governor Rhee Chang-yong has warned that only licensed banks should be allowed to handle issuance to prevent disruptions to monetary stability. Senior Deputy Governor Ryoo Sang-dai suggested a gradual rollout, beginning with the banking sector before expanding to other institutions once safeguards are proven.

If approved, the upcoming legislation could mark a turning point for the country’s crypto ecosystem, balancing innovation with oversight as Asia’s financial heavyweights accelerate their push into stablecoins.

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