The Bank of Korea (BOK) has announced that it will play an active role in shaping South Korea’s upcoming regulatory framework for stablecoins.
In a recent payment systems report, the central bank warned about the financial risks tied to the growing use of stablecoins.
South Korea Commits to Shaping Stablecoin Regulations
Unlike other digital assets, stablecoins are designed to hold steady value and are often used for payments and could pose serious risks if left unchecked, the Bank of Korea stated.
The bank explained that as stablecoin use grows, it could affect how the central bank manages the economy. It could weaken the effectiveness of monetary policy, especially if these coins start replacing traditional forms of payment.
More importantly, they could also act as channels for financial risk, spreading trouble from the crypto world into regular banking systems.
Also Read: South Korea May Permit Foreign Investors in Cryptocurrency Sector If Exchanges Meet AML Requirements
A Push for Stronger Rules
The BOK said it plans to offer its views on how to regulate stablecoins from the standpoint of a central bank. This move comes as South Korea begins drafting a second round of crypto legislation.
This follow-up bill will focus more deeply on how stablecoins are classified and how crypto service providers are regulated. The goal is to provide more clarity and control around token listings, investor disclosures, and overall transparency.
The Financial Services Commission, the country’s top financial regulator, has already said it will begin working on this legislation later this year.
Together with the central bank’s input, this new law aims to create a safer and more predictable environment for digital assets, especially those used for payments.
Crypto Popularity on the Rise
Meanwhile, South Korea continues to embrace crypto at a rapid pace. A recent report from Hana Bank’s research division revealed that about one in three wealthy South Koreans has owned or still holds digital assets.
On average, these individuals invested around 42 million won each last year. This shows how deeply crypto is entering personal investment strategies in the country.
The interest is not limited to the public. Even politicians are making moves as Hong Joon-pyo, a major candidate in the ruling party’s presidential primary, has promised to push for changes in blockchain and crypto regulation. This adds more momentum to the nation’s already strong pro-crypto outlook.
As South Korea works on its next wave of crypto laws, the central bank’s increased involvement signals a new phase. Regulation is no longer just about investor safety, it’s now about maintaining financial stability at a national level.
With crypto adoption growing fast, especially among the wealthy, and political leaders taking a keen interest, the country stands at a key moment.
The BOK’s push to shape stablecoin rules shows that while South Korea supports innovation, it’s also ready to step in and protect its financial system.
Also Read: South Korea’s Top Banks Urge Ruling Party To Ease Crypto Exchange Regulations