Catenaa, Monday, February 02, 2026-South Korea is exploring a registration framework allowing domestic institutions to issue virtual assets while regulators warn that won-denominated stablecoins could circumvent capital controls, Bank of Korea Governor Rhee Chang-yong said.
Rhee highlighted that exchange rate volatility may trigger rapid flows into USD stablecoins, raising concerns over large fund transfers and regulatory oversight.
The proposal comes amid a deadlock between the Bank of Korea, which favors bank-led consortia for stablecoin issuance, and the Financial Services Commission, which opposes fixed ownership thresholds to avoid sidelining technology firms.
Governor Rhee said won-denominated stablecoins would mainly serve cross-border payments, while tokenized deposits would manage domestic transactions.
The won-dollar rate rose to 1,446.2 won per dollar following US tariff threats, though the currency later strengthened to 1,433.3 per dollar after adjustments by South Korea’s National Pension Service.
Despite macroeconomic pressures, the KOSPI index gained 2.73%, supported by Samsung Electronics and SK Hynix stock surges.
South Korea recently ended its nine-year corporate crypto trading ban and amended the Capital Markets Act to allow legal trading of tokenized securities beginning in January 2027.
Pilot projects for tokenized deposits and wholesale central bank digital currencies are ongoing, though Rhee emphasized that retail CBDCs provide limited benefits given the country’s advanced fast payment system.
Earlier initiatives include a KRW-pegged stablecoin developed by the Solana Foundation and Wavebridge, and BDACS’s KRW1 token on Avalanche, each fully backed by won held in escrow at Woori Bank. Regulators continue to weigh the risks of stablecoins while balancing innovation and monetary stability.
