---
title: 'KRW Stablecoin Trends'
category: crypto
tags:
  - stablecoin
published: true
date: 2025-08-27 07:30:43
description: 'Only the Bank of Korea may issue currency, so private KRW stablecoins are effectively blocked. Four 2025 bills are compared on licensing, reserves, and interest.'
---

**Regulatory status and legislative trends for KRW stablecoins**

In Korea, the private-sector issuance of stablecoins pegged to the value of the won is effectively **prohibited.**
- The Constitution of the Republic of Korea: grants the authority to issue currency solely to the Bank of Korea (BOK)
- When the private sector issues tokens worth the same as the won, they become *private money* → concern that this weakens the central bank's monetary policy

### The Bank of Korea's Position

\- **Opposes the issuance of KRW stablecoins by non-bank institutions**
- Concern that an increase in KRW stablecoins would lead to 1) **a surge in market liquidity**, 2) **undermining of financial stability**, and 3) **weakening of monetary policy control**

### The Government's Position

\- Made enactment a national policy task, and as of June 2025 the opposition party has taken the lead in proposing a bill
- This draft bill contains everything from **the definition of virtual assets** to **the regulation of stablecoins** and investor protection safeguards
- The first legislative attempt to **separately specify** the issuance requirements for Korean stablecoins, user protection, the powers of the supervisory authority, and so on
- Officially defines stablecoins as '**value-stable digital assets**' and establishes an issuance, distribution, and supervision framework
- Both the ruling and opposition parties have each separately proposed a series of **bills dedicated to digital assets and stablecoins**

### **Comparison of Major Domestic Stablecoin-Related Bills (latest 25.08)**

[📎 0611_Framework Act on Digital Assets (Rep. Min Byeong-deok).pdf (447 KB)](/files/2025/08/33a049-doc1.pdf)

[📎 0728_Act on the Issuance and Distribution of Value-Stable Digital Assets (Rep. Ahn Do-geol).pdf (207 KB)](/files/2025/08/33a049-doc2.pdf)

[📎 0728_Act on Payment Innovation Using Value-Fixed Digital Assets (Rep. Kim Eun-hye).pdf (169 KB)](/files/2025/08/33a049-doc3.pdf)

[📎 0821_Act on the Value-Stable Digital Asset Issuance Business, etc. (Rep. Kim Hyun-jung).pdf (206 KB)](/files/2025/08/33a049-doc4.pdf)

1.  **Framework Act on Digital Assets** proposed - Rep. Min Byeong-deok (Democratic Party of Korea)
2.  **Act on the Issuance and Distribution of Value-Stable Digital Assets** proposed - Rep. Ahn Do-geol (Democratic Party of Korea)
3.  **Act on Payment Innovation Using Value-Fixed Digital Assets** proposed - Rep. Kim Eun-hye (People Power Party)
4.  **Act on the Value-Stable Digital Asset Issuance Business, etc.** proposed - Rep. Kim Hyun-jung (Democratic Party of Korea)

| <strong>Item</strong> | <strong>Framework Act on Digital Assets</strong> | <strong>Act on the Issuance and Distribution of Value-Stable Digital Assets</strong> | <strong>Value-Fixed Digital Asset Act</strong> | <strong>Value-Stable Digital Asset Issuance Business Act</strong> |
| --- | --- | --- | --- | --- |
| <strong>Proposal</strong> | <strong>Rep. Min Byeong-deok</strong>(Democratic Party of Korea)<br/>- Proposed 2025.6.10 | <strong>Rep. Ahn Do-geol</strong>(Democratic Party of Korea)<br/>- Proposed 2025.7.28 | <strong>Rep. Kim Eun-hye</strong>(People Power Party)<br/>- Proposed 2025.7.28 | <strong>Rep. Kim Hyun-jung</strong>(Democratic Party of Korea)<br/>- Proposed 2025.8.21 |
| <strong>Nature of the bill</strong><br/>(enactment/framework act, etc.) | <strong>Framework act</strong><br/>- A framework act covering digital assets as a whole<br/><em>(*stablecoins are only part of its content)</em> | <strong>Standalone enactment</strong><br/>- A special act for the <em>regulation of stablecoin issuance and distribution</em> | <strong>Standalone enactment</strong><br/>- A special act aimed at <em>payment settlement innovation</em> for stablecoins | <strong>Standalone enactment</strong><br/>- A <em>comprehensive regulation</em> of stablecoins and user protection act |
| <strong>Scope of application</strong> | - A basic regulatory framework for <strong>all digital assets</strong><br/>- As one of these, includes provisions permitting and managing the issuance and distribution of <strong>asset-linked</strong> digital assets (stablecoins) | - The full range of matters concerning the issuance and distribution of <strong>won-based stablecoins</strong> (excluding those linked to other assets, algorithmic types, etc.)<br/>- Targets domestically circulating won-linked stablecoins | - The full range of issuance, use, and related conduct of <strong>stablecoins linked to legal tender</strong> such as the won<br/>- Excludes other virtual assets and is limited to value-fixed digital assets <em>(stablecoins)</em> | - Brings all <strong>stablecoins</strong> circulating domestically (including both domestically issued and foreign-issued) into the regulatory system<br/>- A comprehensive act spanning from issuance-business licensing to a protection fund at the distribution stage |
| <strong>Key definitions</strong> | <em>-</em> <strong>Asset-linked digital asset</strong>: a digital asset issued in linkage to the value of a specific underlying asset (an umbrella term for stablecoins)<br/>- <strong>Issuer</strong>: a corporation licensed by the FSC<br/>- <strong>User:</strong> digital asset users in general | <em>-</em> <strong>Value-stable digital asset:</strong> an electronic representation whose value is stabilized by being linked to the value of a specific asset<br/>- <strong>Issuer</strong>: a licensed issuing operator<br/><strong>- User:</strong> a stablecoin holder (able to claim redemption) | <em>-</em> <strong>Value-fixed digital asset:</strong> defined as a digital asset that seeks value stability by being linked to the value of a specific asset such as legal tender<br/>- <strong>Issuer</strong>: a licensed issuing operator<br/>- <strong>User</strong>: a stablecoin holder (able to claim redemption) | - <strong>Value-stable digital asset:</strong> a digital asset that stabilizes its value by being linked to real assets such as legal tender<br/>- <strong>Issuer</strong>: a licensed issuing operator<br/>- <strong>User:</strong> a holder of the issued stablecoin |
| <strong>Competent authority and supervisory framework</strong> | - Centered on the <strong>Financial Services Commission (FSC)</strong><br/>- Establishment of a <strong>Digital Asset Committee under the direct control of the President</strong><br/>- Relevant agencies may participate in the Digital Asset Committee<br/>- Concurrent introduction of a market <strong>self-regulatory organization</strong> (Digital Asset Industry Association) | - <strong>Financial Services Commission (FSC) + consultative body</strong><br/>- The FSC handles licensing and inspection<br/>- Establishment of a <em>Digital Asset Committee</em> with participation from the <strong>Ministry of Economy and Finance and the Bank of Korea (BOK)</strong>, among others<br/>- Multi-agency joint supervision from a financial-stability standpoint | - <strong>Supervision by the Financial Services Commission (FSC) alone</strong> (prefers a streamlined supervisory framework)<br/>- Through an issuer registration system, the FSC oversees licensing, cancellation, etc.<br/>- The <strong>Bank of Korea (BOK)</strong> has the authority to request data submission and inspection opinions under monetary and credit policy <em>(no separate consultative body is established; the BOK is directly involved)</em> | - The <strong>Financial Services Commission (FSC)</strong> is the competent ministry<br/>- Authority over issuance-business licensing and supervision<br/>- The Bank of Korea and others are not given a direct supervisory role in the bill <em>(though the possibility of consultation to consider monetary-policy impact is mentioned)</em><br/>- The user protection fund is managed by the FSC |
| <strong>Issuer licensing system and requirements</strong> | <strong>Introduces a licensing system</strong><br/>- FSC issuance-business license required<br/><strong>Licensing requirements</strong><br/>- Equity capital of <strong>KRW 500 million</strong> or more<br/><strong>Eligible applicants</strong><br/>- Domestic corporations (startups such as fintechs may also enter), meeting soundness requirements<br/>- Issuance permitted not only for banks but also for non-financial companies | <strong>Introduces a licensing system</strong><br/>- FSC issuance-business license required<br/><strong>Licensing requirements</strong><br/>- Equity capital of <strong>KRW 5 billion</strong> or more<br/>- Information-security specialists and an internal control system are mandatory<br/>- Requirements are effectively designed around financial companies such as banks<br/><strong>Eligible applicants</strong><br/>- Domestic stock corporations and financial institutions, or foreign corporations with a domestic branch<br/><em>(this means foreign companies can also apply for a license if they have a domestic branch)</em> | <strong>Introduces a licensing system</strong><br/>- FSC issuance-business license required<br/>Licensing requirements<br/>- Equity capital of <strong>KRW 5 billion</strong> or more<br/>- Securing an appropriate internal control and security system, etc.<br/><strong>Eligible applicants</strong><br/>- Both domestic corporations and foreign corporations with a domestic place of business are allowed. The issuing entity is not specifically limited to banks; non-financial companies may also register if they meet the requirements | <strong>Introduces a licensing system</strong><br/>- FSC issuance-business license required<br/><strong>Licensing requirements</strong><br/>- Equity capital of <strong>KRW 5 billion</strong> or more<br/>- A sound business plan and meeting the prescribed human and physical requirements <strong>Eligible applicants</strong><br/>- Not limited to financial institutions such as banks; non-financial companies are also allowed (any domestic corporation that meets the requirements) |
| <strong>Reserve asset requirements and management</strong> | Obligation to maintain <strong>backing assets</strong> of <strong>100% or more of the issued amount</strong><br/><strong>- Asset composition:</strong> centered on safe assets, to be determined by subordinate regulations<br/>- Bankruptcy-remoteness measures applied to reserve assets<br/>- Details such as separate trust management and disclosure are delegated to the enforcement decree | Obligation to maintain <strong>backing assets</strong> of <strong>100% or more of the issued amount</strong><br/>- <strong>Asset composition</strong>: <strong>liquid assets</strong> such as cash, demand deposits, and government and municipal bonds with maturities ≤1 year<br/>- Reserve assets must be held separately through a custodian (trust, etc.) with a bankruptcy-remoteness obligation<br/>- In the event of the issuer's insolvency, reserve assets are used to repay users on a priority basis | Obligation to maintain <strong>backing assets</strong> of <strong>100% or more of the issued amount</strong><br/>- <strong>Asset composition:</strong> may be held not only in cash, bank deposits, and government and public bonds but also in private bonds (≤1 year), etc. (relaxed)<br/>- Reserve assets must be managed separately, such as in trust, and segregated from the issuer's assets with a bankruptcy-remoteness obligation | Obligation to maintain <strong>backing assets</strong> of <strong>100% or more of the issued amount</strong><br/>- <strong>Asset composition:</strong> short-maturity, high-quality financial instruments such as cash, government bonds, municipal bonds, special bonds, and MMFs<br/>- Obligation to hold separately from the issuer's assets and a trust/bankruptcy-remoteness obligation<br/>- Even if the issuer goes bankrupt, users' priority right of repayment over the reserve assets is specified |
| <strong>Disclosure obligations</strong> | Includes <strong>mandatory disclosure and the introduction of a system for reviewing disclosure content</strong><br/>(at the framework-act level)<br/>- Introduction of disclosure verification through a self-regulatory organization | <strong>Obligation of white paper disclosure and periodic disclosure</strong><br/>- Obligation to submit and publicly disclose a product prospectus including the total issuance limit, reserve asset composition, redemption method, etc.<br/>- Obligation to disclose reserve asset details monthly and report periodic accounting audits<br/>- Provision for liability for damages if the white paper or disclosure materials contain false content | <strong>Obligation of white paper disclosure</strong><br/>- A product prospectus (including the issuer, business plan, technology, reserve assets, redemption method, etc.) must be submitted and disclosed within 3 days<br/>- However, a periodic disclosure obligation is not specified<br/>- Provision for civil liability for damages when statements are false | <strong>No specific mention</strong><br/>- Possibility of requiring a white paper or prospectus for user protection<br/><em>(no specific disclosure content mentioned)</em> |
| <strong>Redemption obligations and user protection measures</strong> | Guarantees user rights through <strong>redemption obligations and reserve asset management</strong><br/>- Framework-act-level provisions such as support for digital asset damage relief<br/>- Detailed provisions for protecting stablecoin holders are delegated to a later enforcement decree | Obligation to redeem in won <strong>within 3 business days</strong> of a redemption request<br/>- Provision for sanctions in the event of failure to fulfill the redemption obligation<br/>- <strong>All interest payments completely prohibited</strong><br/>- Provisions for civil remedies such as damages when the white paper is false<br/>- Prevention of misuse of user assets through strengthened internal controls. | Obligation to redeem in won <strong>within 10 business days</strong> of a redemption request - Emphasizes guaranteeing fulfillment of the redemption obligation to users<br/>- <strong>Interest payment permitted</strong><br/>- No separate user protection fund or insurance provision | Provision for <strong>immediate redemption</strong><br/>- Legislates a <strong>priority right of repayment</strong> for users in the event of the issuer's bankruptcy<br/>- Introduction of a <strong>protection fund for foreign-issued stablecoins</strong><br/>- Reserves accumulated in proportion to the quantity of foreign coins held by domestic exchanges |
| <strong>Regulation of foreign-issued assets</strong> | <strong>- For foreign-issued general digital assets</strong>, specifies only the regulatory principles (scope of domestic user protection, etc.)<br/>- Does not establish separate provisions for stablecoins | <strong>- Foreign-issued stablecoins</strong> are not directly licensed<br/>- Listing is left to the listing-eligibility review of domestic VASPs (exchanges)<br/>- That is, when supporting trading, each individual exchange conducts risk assessment and disclosure to protect users<br/>- There are no separate central-level registration or licensing provisions | <strong>-</strong> Foreign-issued stablecoins are also recognized as domestic value-fixed digital assets if they meet certain requirements and <strong>register with the FSC</strong><br/>- That is, official distribution of foreign stablecoins is permitted (if domestic standards are met) | - Registration with the FSC is required to circulate domestically<br/>- In addition, an obligation to accumulate a protection fund is imposed to protect domestic users<br/>- When a domestic exchange handles foreign coins, it must reserve a certain amount<br/>- Through this, Tether (USDT), USDC, and others are also brought within the regulatory scope |
| <strong>Sanctions for violations</strong> | - Comprehensive sanction provisions apply under the framework-act system<br/>- Penalties for unlicensed business and fraudulent conduct<br/>- The supervisory authority may issue corrective orders and revoke business licenses<br/>- Detailed penalties are provided at the level of applying other financial laws by analogy | - Promising or paying interest is illegal and subject to criminal punishment<br/>- Penalty provisions for unlicensed business and violations of reserve asset requirements<br/>- Provision for liability for damages when users are harmed by false white paper disclosure, etc. (includes penalty surcharge and administrative fine provisions) | - Sanction provisions such as criminal punishment and business suspension for unregistered issuance<br/>- Imposition of administrative fines, criminal fines, etc. for non-compliance with reserve assets and for misconduct<br/>- Since interest payment is permitted, there are no related punishment provisions | - Strong sanctions such as imprisonment or fines for unlicensed issuance or misconduct<br/>- Imposition of administrative fines, etc. for violations of reserve requirements and reporting obligations<br/>- Includes sanction provisions against exchanges for handling unregistered foreign coins |
| <strong>Other notable features</strong> | <strong>Comprehensive framework act</strong><br/>- A comprehensive act encompassing the entire digital asset industry<br/>- <strong>KRW 500 million entry barrier</strong>: the lowest entry barrier compared with the other bills → easy for startups to participate<br/>- <strong>Digital Asset Committee</strong>: a policy-coordination body under the direct control of the President, pursuing both market promotion and investor protection<br/>- <strong>Introduction of self-regulation</strong>: legislates the role of an industry self-regulatory organization | <strong>- Complete prohibition of interest payments</strong>: interest, discounts, rewards, and any other pretext are <em>deemed interest</em> and prohibited (so that stablecoins function as currency-purpose assets rather than investment products)<br/>- <strong>Financial stability first</strong>: designed to consider monetary policy and to prevent the erosion of bank deposits<br/>- <strong>Strengthened internal controls</strong>: controls issuers at the level of financial companies, e.g., requiring dedicated personnel<br/>- <strong>Cooperation among the FSC, MOEF, and BOK</strong>: establishment of a consultative body of relevant agencies | - <strong>Interest payment permitted</strong>: no prohibition provision → <em>interest can be offered on stablecoins</em> (deposit-like services may also be possible in the future)<br/>- <strong>Innovation-oriented stance</strong>: focuses on industry activation and competitiveness rather than regulation<br/>- <strong>Negative regulation</strong>: grants flexibility by delegating detailed requirements to the enforcement decree, etc. | <strong>-</strong> The first legislation comprehensively covering stablecoin issuance and distribution<br/>- <strong>Lessons from the Terra-Luna incident</strong>: strengthens protective safeguards (priority repayment, protection fund, etc.) against issuer insolvency<br/>- <strong>Regarding interest payments</strong>: the bill mentions no explicit prohibition provision, <em>with the practical possibility that payment is permitted</em><br/>- Mandates registration with the FSC when foreign-issued stablecoins are distributed domestically |

### Common Features of the Major Bills

1.  Defines stablecoins as *digital assets that aim for value stability by linking their value to a specific asset (primarily legal tender)*
2.  **Issuer qualifications**
    1.  They agree on regulating the stablecoin issuance business through a permit (licensing) system
        1.  Stipulates that stablecoins are issued by an issuer (corporation) that has obtained authorization from the financial authorities
        2.  Only authorized institutions may issue KRW stablecoins
    2.  Under the shared understanding that issuing coins without a permit is illegal, the state reviews requirements to screen issuers
    3.  Opens the way not only to traditional financial institutions such as banks but also to non-financial companies above a certain size
3.  **Reserve asset regulation**
    1.  Requires issuers to hold **reserve assets equal to 100% of the value of the stablecoins they have issued**
        1.  Limited to highly liquid safe assets such as cash, government bonds, municipal bonds, special bonds, and MMFs
    2.  Designed to guarantee the stability of the stablecoin's value and to **protect user funds** even in the event of bankruptcy
        1.  Reserve assets must be held separately from the issuer's own property
4.  **Issuance procedures and disclosure**
    1.  Stablecoin issuers must prepare a white paper disclosing in detail the issuer's identity, issuance limit, distribution plan, reserve asset details, etc., and submit it to the supervisory authority
    2.  Includes an obligation of **periodic disclosure** of the issued balance, reserve asset details, and so on
5.  **User protection and liability**
    1.  Through the obligation to guarantee the right to claim redemption, stablecoin holders must be able to redeem their coins at the same value.
    2.  To protect the rights and interests of stablecoin holders, the bills explicitly grant a **right to claim redemption**, **priority over assets**, and the like
    3.  Even if the issuer goes bankrupt, users have the right to be repaid on a priority basis over the reserve assets
    4.  Customer deposits are protected separately from other assets

### Conclusion

- As Korea has pushed forward the **Framework Act on Digital Assets** and **individual stablecoin bills** since 2025, the legal status and issuance requirements of KRW stablecoins are taking concrete shape.
- The bills are still under review in the National Assembly, and although some details may change before final passage, the overall thrust comes down to 'establishing safeguards that conform to global standards'
- Korea, too, seems to intend to bring private stablecoins into the regulatory system but operate them under **strict requirements and supervision**

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### (Appendix) Global Stablecoin Regulatory Landscape

![](33a049-Screenshot-2025-08-27-at-9.51.19---AM.png)

*Source: Toss Insight - Stablecoin Report*