South Korea’s central bank is taking a cautious approach to launching stablecoins, urging that only highly regulated commercial banks should initially be allowed to issue them. Bank of Korea (BOK) Deputy Governor Ryoo Sangdai emphasized this in a press conference, stressing the need for a safety net to prevent market instability and protect consumers. He stated that once the system is stable, expansion to non-banking sectors could be considered.

Ryoo warned that premature or broad deployment of stablecoins could accelerate capital outflows and disrupt Korea’s longstanding foreign exchange policies. He also noted that the shift might trigger restructuring in the financial sector, possibly leading to narrow banking models.

Bank of Korea Governor Rhee Chang-yong echoed Ryoo’s cautious stance, stating he doesn’t oppose a stablecoin tied to the Korean won but remains wary of its potential impact on foreign exchange management.

Meanwhile, the country is also advancing its own central bank digital currency (CBDC) as a direct countermeasure to stablecoins. The BOK is concluding its first CBDC pilot by June 30, with a second phase pending further policy clarity.

South Korea’s stance is developing alongside a broader global movement. Visa has partnered with Yellow Card Financial to expand stablecoin usage in Africa. Russia’s finance ministry and key financial institutions in Abu Dhabi have also announced plans to issue government-backed stablecoins this year.

Domestically, the Digital Asset Basic Act proposed by the ruling Democratic Party would allow stablecoin issuance by companies with at least $368,000 in equity, indicating legislative support despite regulatory hesitation.

As stablecoins gain momentum worldwide, South Korea is opting for a measured rollout, balancing innovation with financial stability.