South Korea Establishes Virtual Asset Team to Oversee Crypto Regulation and Policy

South Korea’s Bank of Korea is reportedly establishing a specialized virtual asset team to oversee the evolving digital asset market and engage in discussions on crypto-specific legislation [1]. This development comes as the country continues to refine its regulatory approach under the leadership of President Lee Jae-myung, who was elected in June and has expressed support for a local stablecoin ecosystem [2]. The team will monitor digital asset activities and assess the regulatory implications of cryptocurrencies, including Korean won-denominated stablecoins, which are digital tokens pegged to fiat currencies [1].

The initiative aligns with global efforts to regulate the fast-growing crypto sector. As digital currencies gain mainstream traction, regulators worldwide are balancing innovation with oversight to address risks such as volatility, fraud, and illicit financial flows. The Bank of Korea’s move signals a more structured and proactive approach to managing these challenges, potentially setting a precedent in Asia for regulatory innovation [1]. The team is expected to play a key role in evaluating the impact of virtual assets on monetary policy and financial stability, particularly as crypto markets become increasingly influential [1].

The central bank’s actions follow the passage of the Virtual Asset User Protection Act in 2023, which aimed to clarify the legal status of digital assets and impose penalties for unfair practices. However, existing legislation appears to lack specificity for emerging developments in the sector, such as stablecoins and decentralized finance. The establishment of the virtual asset team suggests an intent to address these gaps and develop more targeted regulatory measures [1].

This step also supports greater coordination between regulatory bodies and international partners. As the Bank of Korea explores new legislative directions, it is likely to seek input from industry stakeholders and global regulators to ensure its policies remain both effective and adaptable. The team’s findings could inform broader financial regulations and help align South Korea’s crypto framework with international standards [1].

The Bank of Korea did not respond to a request for comment from CoinDesk, but the reported initiative highlights the country’s growing recognition of the significance of digital currencies in its financial landscape [1].

Source: [1] Policy - https://www.coindesk.com/policy

[2] Bitcoin's Momentum Is Losing Steam as Seasonal - https://www.newsbreak.com/coindesk-1870864/4149****98941-bitcoin-s-momentum-is-losing-steam-as-seasonal-headwinds-loom-10x-research-says