Bank of Korea Establishes Virtual Asset Team to Regulate Cryptocurrencies, Stablecoins Amid Political Debates

The Bank of Korea (BOK) has established a dedicated virtual asset team under its Financial Payments Bureau to monitor and regulate developments in the cryptocurrency and stablecoin sectors, according to multiple reports [1][3][7]. This initiative aligns with the central bank’s broader strategy to address the growing complexity of digital assets, which include both cryptocurrencies and stablecoins pegged to fiat currencies. A BOK official emphasized the team’s focus on “discussions on stablecoins and virtual assets” while collaborating with regulatory bodies to ensure a coordinated approach [3][17].

The new team’s formation follows South Korea’s political debates over stablecoin legislation, with ruling and opposition parties proposing competing bills. A key point of contention is whether to prohibit interest payments on stablecoins, a feature some lawmakers argue could destabilize financial markets [2][12][22]. This legislative uncertainty reflects broader challenges in balancing innovation with risk mitigation, particularly in curbing money laundering and speculative trading. Meanwhile, the BOK has postponed its retail central bank digital currency (CBDC) test, initially scheduled for April to June 2025, due to unresolved legal uncertainties and concerns from banks about participation costs [3][14].

Regulatory gaps remain critical. South Korea’s Foreign Exchange Transactions Act requires amendments to explicitly incorporate virtual assets, a step deemed essential to combat illicit forex crimes. Over 80% of foreign exchange crimes detected in recent years involved virtual assets, according to Rep. Choi Eun-seok, a proponent of updated regulations [4][24]. The BOK’s virtual asset team is expected to contribute to addressing these gaps, though progress hinges on political cooperation and legal adjustments.

The urgency for regulatory clarity is amplified by global trends, such as the U.S. GENIUS Act, which formalized stablecoin use in 2025 [14]. However, South Korea faces unique challenges: the won’s non-reserve currency status and limited offshore convertibility complicate the introduction of globally traded won-pegged stablecoins. Analysts warn that premature adoption of such stablecoins without aligning with international currency policies could exacerbate exchange rate volatility and undermine government control over forex markets [14].

Parallel to these efforts, the BOK has restructured its digital currency initiatives. The Digital Currency Research Team was renamed the “Digital Currency Team” to emphasize its practical role in exploring digital currency projects beyond theoretical research. Two additional teams now focus on technology and infrastructure, including developing a digital voucher management platform based on deposit tokens [3]. Meanwhile, eight major South Korean banks have announced plans to launch a won-pegged stablecoin in late 2025 or early 2026, a move supported by Deputy Governor Ryoo Sangdai, who advocates for banks as primary stablecoin issuers [3].

The BOK’s virtual asset team is also tasked with evaluating the implications of decentralized finance (DeFi) and blockchain infrastructure, though specific measures remain undefined. This approach mirrors strategies in the U.S., where regulators balance innovation with stability [28]. As South Korea navigates these developments, the outcome of its legislative and regulatory efforts will shape its position in the global financial landscape, where stablecoins and cryptocurrencies are increasingly seen as strategic imperatives.

Source:

[1] South Korean internet bank K-Bank establishes digital asset working group, [https://www.mexc.com/es/news/south-korean-internet-bank-k-bank-establishes-digital-asset-working-group/62706]

[2] South Korea's Ruling, Opposition Parties Clash Over Stablecoin Regulation, [https://decrypt.co/332237/south-koreas-ruling-opposition-parties-clash-over-stablecoin-regulation]

[3] Daily Digital Currency News Summary (2025-07-30), [https://news.futunn.com/en/post/59803154/daily-digital-currency-news-summary-2025-07-30]

[4] Before a won-pegged stablecoin, Korea needs won internationalization, [https://koreajoongangdaily.joins.com/news/2025-07-30/opinion/columns/Before-a-wonpegged-stablecoin-Korea-needs-won-internationalization/2363984]

[7] Daily Digital Currency News Summary (2025-07-30), [https://news.futunn.com/en/post/59803154]

[12] South Korea's Ruling, Opposition Parties Clash Over Stablecoin Regulation, [https://decrypt.co/332237/south-koreas-ruling-opposition-parties-clash-over-stablecoin-regulation]

[14] Before a won-pegged stablecoin, Korea needs won internationalization, [https://koreajoongangdaily.joins.com/news/2025-07-30/opinion/columns/Before-a-wonpegged-stablecoin-Korea-needs-won-internationalization/2363984]

[17] Daily Digital Currency News Summary (2025-07-30), [https://news.futunn.com/en/post/59803154]

[22] South Korea's Ruling, Opposition Parties Clash Over Stablecoin Regulation, [https://decrypt.co/332237/south-koreas-ruling-opposition-parties-clash-over-stablecoin-regulation]

[24] Before a won-pegged stablecoin, Korea needs won internationalization, [https://koreajoongangdaily.joins.com/news/2025-07-30/opinion/columns/Before-a-wonpegged-stablecoin-Korea-needs-won-internationalization/2363984]

[28] CryptoLink - June 2025, [https://www.jdsupra.com/legalnews/cryptolink-june-2025-3478752]