South Korea’s central bank has reiterated that regulators should initially permit only licensed commercial banks to issue won-denominated stablecoins, citing concerns over money laundering and risks to financial stability.
The renewed caution from the Bank of Korea follows a loss of confidence in the country’s digital-asset sector this month.
Crypto exchange Bithumb mistakenly transferred US$40 billion worth of so-called “ghost” Bitcoin to clients, according to Bloomberg.
The incident has intensified scrutiny of a crypto market that has at times surpassed equities in retail participation.
“It would be desirable to allow stablecoins primarily within the banking sector first,”
the Bank of Korea said this in a report submitted to parliament on Monday (February 23).
It noted that banks are subject to stringent regulatory standards on capital adequacy, financial soundness, corporate governance and compliance.
The central bank warned that such tokens could be used to circumvent foreign-exchange regulations, which largely apply only to banks.
It also highlighted risks associated with allowing non-bank issuers, including potential breaches of the long-standing principle that restricts non-financial companies from owning or controlling banks.
The BOK said regulators could expand participation to non-bank institutions at a later stage, once they have assessed the institutions’ ability to absorb risk.
Across Asia, central banks and financial regulators have approached stablecoins with caution. They have allowed only a limited group of entities to issue tokens, subject to tight supervision.
The Hong Kong Monetary Authority (HKMA) has set a “reasonably high bar” for assessing applications for stablecoin issuer licenses. It outlined this stance in August 2025.
In Japan, the Financial Services Agency (FSA) has approved a proof-of-concept for token issuance. The initiative is being led by three megabanks, according to Finance Minister Satsuki Katayama in November.
In South Korea, sentiment towards crypto has weakened following the Bithumb incident. The Bank of Korea’s firm stance on stablecoins has reinforced that shift.
Together, these factors are likely to create additional hurdles for President Lee Jae Myung, who has pledged broad deregulation of the digital-asset industry.
South Korean lawmakers are currently debating the next phase of digital-asset legislation, which includes provisions on stablecoins.
Han Jeoung-ae, policy committee chair of the ruling Democratic Party, said the panel aims to submit the bill in February.
Featured image credit: Edited by Fintech News Hong Kong, based on image by Dang Pham, Dang Pham and alexokov via Freepik