South Korea plans to further its digital currency development with upcoming regulations, sources claim.
South Korea Takes a Leap Forward in Stablecoin Adoption
South Korea is making significant strides in the world of stablecoins, with the Financial Services Commission (FSC) preparing to submit a regulation bill for won-denominated stablecoins to the National Assembly. This move, expected to be finalized and enacted by October 2025, positions South Korea as a pioneering Asian market with a comprehensive and strict regulatory regime for stablecoins.
The launch of KRWIN, a stablecoin pegged 1:1 to the Korean won, by South Korean entertainment platform fanC and financial software firm Initech on August 5, is seen as a major milestone in advancing stablecoin adoption in South Korea. Lee Dong-ho, a spokesperson for fanC, called the launch of KRWIN a significant step towards a more digital economy.
The evolving regulatory framework for stablecoins in South Korea includes stringent rules on issuance, collateral requirements, risk management, and internal controls. Issuers must maintain 100% reserves in highly liquid assets to ensure stability and user reimbursement within three business days. The framework also includes regulatory oversight by the FSC, Bank of Korea, and Ministry of Economy and Finance, with emergency powers to handle market disruptions.
The government sees won-pegged stablecoins as a strategic tool to reduce dependence on the US dollar and reinforce South Korea’s financial sovereignty in the digital economy. The new law aims to be rigorous and transparent to build trust and facilitate a modern, reliable market for stablecoins within South Korea.
Multiple legislative proposals exist, such as the Value-Stable Digital Assets Bill introduced by lawmaker Ahn Do-geol, which aligns with President Lee Jae-myung’s priorities to regulate stablecoins with strong safeguards. The bill aims to ensure user protection and transparency, making the market more accessible and reliable for users.
The rollout of supportive legislation in the United States has contributed to the growth of interest in stablecoins globally, and other Asian countries, including Japan and Hong Kong, are also pushing for similar stablecoin initiatives. South Korea's push for crypto ETFs is another step towards powering up the local market.
While dollar-pegged assets like USDT (USDT) and USDC (USDC) continue to dominate the market, it remains to be seen how Asian markets can catch up. KRWIN is currently being distributed to internal groups affiliated with the firms, but a broader rollout is signaled by a filed trademark application. The pilot program for KRWIN is testing its technical feasibility, including transferability and real-world applications in payments, remittances, and tourism.
As South Korea moves closer to finalizing its stablecoin regulatory framework, it is expected to set a strong example for other countries looking to adopt stablecoins and embrace the digital economy.
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