South Korea’s Stablecoin Circus: Delays, Disagreements & Digital Antics

by

South Korea’s Stablecoin Circus: Delays, Disagreements & Digital Antics

In a spectacle that could make even the most hardened bureaucrat yawn into their kimchi, South Korea’s much-anticipated stablecoin legislation seems destined to stumble into the new year like a drunken donkey. The cause? A fiery spat between financial authorities and the Bank of Korea (BOK), all over the role banks should play in this digital dance. 🎭

BOK, Financial Regulators In Disagreement

On Tuesday, the renowned Korea JoongAng Daily reported that the grand stablecoin framework, eagerly awaited to grace us by the end of 2025, is more likely to be delayed than delivered. Apparently, while tech companies dream of a free-for-all market, the central bankers insist that banks must hold at least a lion’s share of the digital pie-specifically, over 51%. Because, of course, stability is best maintained by banks-who have historically proven to be paragons of unchangeable wisdom. 🏦

The newspapers reveal that both sides agree banks should be involved, but they can’t quite agree on how involved. The BOK is pushing for an alliance of banks wielding control, while regulators are eager to let innovation run wild-perhaps a little too wild for the comfort of the central banking elite.

There are unresolved issues-like total issuance caps and regulatory rules-that remain as murky as a cheap soju. Meanwhile, the BOK is calling for a mysterious “unanimous interagency council” to make all stablecoin decisions, although lawyers are busy pointing out that such a requirement might lack legal legs. ⚖️

In July, the BOK Governor Lee Chang-yong sounded the alarm, warning that if non-bank entities start issuing stablecoins at will, it could lead to chaos akin to the 19th-century wild currency issuance-minus the top hats and waistcoats. He fears this could throw a wrench into Korea’s monetary and foreign exchange policies, and no one really wants a repeat of that chaotic period, with added digital flair.

Last month, the BOK warned that while stablecoins could boost the Korean economy, they might also “sow the seeds of instability”-a polite way of saying, “we’re nervous, folks!” The report claimed that allowing private companies to create stablecoins might lead to “monetary narrow-mindedness,” effectively turning corporations into tiny central banks-without any of the stabilizing charm.

Furthermore, the BOK warns that tech giants issuing their own stablecoins could monopolize payment and settlement services, transforming the digital landscape into a “corporate playground,” with banks left holding a bag of shrinking profits. 🏦🚫

Korea’s Stablecoin Dilemma: Who Gets to Play?

An anonymous BOK official was quick to point out that banks, already seasoned in anti-money laundering protocols and diligently regulated, are the best guardians of stablecoin issuance-because, naturally, they are the custodians of trust and stability. 🙄

Yet, many in the tech world worry that giving banks the majority stake could crush innovation, leaving startups in a digital wasteland. Some financial players are exploring joint ventures-think of it as a business-friendly divorce-while others hesitantly watch from the sidelines, unsure whether a won-backed stablecoin will even be a thing.

As the regulatory fog thickens, some tech firms are preparing to wait and see, holding off on bold moves until the legal roadmap becomes clearer-assuming that ever happens. Recently, a report by Hashed Open Research threw a spicy suggestion onto the table: Korea should model its capital market more like the wild West-tethered, of course, to giants like Tether and Circle-rather than sticking to the banker’s straitjacket.

Kim Sang-bong, an academic with too much free time, says stablecoins shouldn’t be entirely in tech hands if Korea hopes to earn trust. “Let’s be honest,” he said, “if banks dominate, innovation will sputter. Maybe start by licensing card companies and payment firms-less fuss, more fun.”

Meanwhile, the image below captures a snapshot of the digital chaos on the horizon:

Crypto chaos in Korea

Read More

2025-11-26 10:15