Bank of Korea Establishes Cryptoassets Department to Monitor Stablecoins and Market Risks

The Bank of Korea (BOK) has established a dedicated “Cryptoassets Department” to oversee the nation’s evolving virtual asset landscape, signaling a strategic shift from research to active implementation in its digital currency strategy. Operational since July 31, the new unit replaces the existing Digital Currency Research Lab, which has been rebranded to reflect a broader focus beyond experimentation. The department, housed under the BOK’s Financial Settlement Bureau, will monitor crypto market dynamics, assess risks, and evaluate the performance of Korean won-pegged stablecoins across platforms. This move underscores the central bank’s pivot toward prioritizing stablecoins as functional equivalents to deposit tokens issued by commercial banks, potentially reducing reliance on a state-led central bank digital currency (CBDC) initiative [1][3].

The reorganization aligns with shifting regulatory priorities and growing political support for private sector innovation. Recent legislative proposals by South Korea’s major political parties aim to transfer stablecoin oversight from the BOK to the Financial Services Committee, a move the central bank has criticized as a potential threat to its monetary policy influence. In response, the new department will focus on maintaining supervisory authority as the regulatory framework evolves. This includes tracking developments in bank-issued tokens and corporate stablecoins, which are gaining traction in both private and public sectors. Major tech firms have already filed trademarks for Korean won-backed stablecoin products, positioning themselves ahead of anticipated regulatory reforms [3].

The BOK’s decision to pause its CBDC rollout further highlights its strategic recalibration. By redefining stablecoins as viable alternatives to state-issued digital money, the central bank is fostering a bank-led digital payments ecosystem. This approach prioritizes collaboration with commercial institutions over direct CBDC development, supported by the BOK’s view of stablecoins and deposit tokens as interchangeable when pegged to the won. The shift reflects a broader effort to balance innovation with risk management, particularly as global competition in stablecoin development intensifies.

Private sector momentum is accelerating, with companies preparing for a tokenized future by securing intellectual property for won-backed stablecoins. The BOK’s expanded oversight role underscores its commitment to shaping regulatory frameworks and technical standards for stablecoin adoption while stepping back from direct digital currency issuance. This repositioning emphasizes the central bank’s focus on monitoring market behavior, ensuring stability, and adapting to the rapid evolution of the crypto ecosystem [3].

The reorganization highlights South Korea’s evolving approach to digital finance, balancing regulatory scrutiny with support for private sector experimentation. As stablecoin-focused legislation advances, the BOK’s Cryptoassets Department will play a critical role in maintaining monetary stability while navigating the complexities of a rapidly changing landscape.

Sources:

[1] title: Bank of Korea launches new crypto oversight unit (https://dig.watch/updates/bank-of-korea-launches-new-crypto-oversight-unit)

[2] title: Bank of Korea creates a new virtual asset department (https://www.mitrade.com/insights/news/live-news/article-3-997136-20250730)

[3] title: Bank of Korea forms crypto unit as stablecoin rules shift (https://invezz.com/news/2025/07/30/bank-of-korea-forms-crypto-unit-as-stablecoin-rules-shift/)