South Korea has introduced a new regulatory framework for stablecoins, aiming to harness the nation’s vibrant cryptocurrency market while ensuring financial stability. Announced today, the bill allows local firms with at least $368,000 in equity to issue reserve-backed stablecoins, tapping into a market that saw $40.6 billion in trading volume in Q1 2025.
President Lee Revisits Election Promise
During the 2025 presidential election, Lee Jae-myung, elected on June 4 with 49.42% of the vote, campaigned on a pro-crypto platform to appeal to South Korea’s 15 million crypto investors. He pledged to legalize spot crypto exchange-traded funds (ETFs), currently banned, and allow institutional investments, including by the $884 billion National Pension Fund.
Lee also advocated for a won-backed stablecoin to reduce reliance on foreign stablecoins like USDT and USDC, aiming to prevent capital flight and strengthen national wealth. These promises, including a safer crypto environment for young investors, highlight his vision for a digital asset change, contrasting with the unclear crypto laws of the past.
South Korea’s Evolving Regulatory Stance
South Korea’s crypto market, one of the world’s most active, has historically faced stringent compliance-focused regulations. The Financial Services Commission has been cautious, with the Bank of Korea expressing concerns about stablecoins impacting monetary policy. The new bill introduces a legally recognized self-regulatory body, a stablecoin approval system, and clearer rules for crypto service providers.
Unlike the Terra collapse, which highlighted risks, the proposed won-backed stablecoin will reportedly be centralized and fiat-backed, aligning with global trends. The framework aims to legitimize stablecoins, foster institutional participation, and create special blockchain zones, marking a shift toward integration with traditional finance.
South Korea’s new stablecoin rules under President Lee aim to improve the financial sector. The government will allow spot crypto ETFs, let pension funds invest, and introduce a stablecoin backed by the won. These changes aim to increase liquidity and build investor confidence. Meanwhile, the central bank’s efforts to manage this situation show the ongoing need to balance innovation with stability.
Meanwhile, in another development, Brian Quintenz, nominee to lead the United States Commodity Futures Trading Commission, has pledged to provide clear classification and jurisdictional clarity for digital asset market regulation in a written statement shared ahead of his nomination hearing.
