- The Bank of Korea is proposing a new multi-department policy group to guide stablecoin regulations.
- Korea’s government is debating stablecoin oversight between the Financial Services Commission and the central bank.
- The proposed committee would give parties potential veto power on stablecoin issuances.
- Major Korean banks have formed a consortium to launch their own stablecoins, reflecting industry growth in this area.
- The U.S. GENIUS Act and its review committee provide a partial model for Korea’s current discussions on stablecoin supervision.
The Bank of Korea (BOK) has recommended forming a multi-agency body to develop stablecoin policy in the country. The proposal comes as the government reviews how to oversee the growing use of stablecoins in Korea.
According to the Korea Herald, the BOK emphasized the need for a “pan-governmental regulatory response” on stablecoins. The central bank’s statement, addressed to the policy planning committee, suggests that a group including all relevant authorities should be formed to shape future policy.
Currently, there are two competing legislative drafts under consideration. One plan would place stablecoin supervision under the Financial Services Commission (FSC), while another would require the FSC to factor in the central bank’s concerns. These drafts also differ on related issues like stablecoin capital requirements, and it remains unclear which version will become law.
The BOK noted that a new committee could give its members veto authority over new stablecoin issuances. In comparison, the U.S. GENIUS Act created a Stablecoin Certification Review Committee with limited power, including deciding if large public non-bank firms can issue stablecoins. There are concerns that major social media companies could use their networks to dominate the stablecoin market. In Korea, social media company Kakao has significant involvement in blockchain and holds a major stake in a bank.
The GENIUS Act committee also provides guidance on foreign stablecoins and ensures state regulators follow federal stablecoin standards.
Korea’s draft legislation, like the GENIUS Act, does not limit what type of company can issue a stablecoin. Previously, the BOK supported only allowing banks to launch stablecoins. Industry interest remains high, as several major Korean banks have joined together through the Open Blockchain DID Association to lay groundwork for their own stablecoin infrastructure.
When first announced in April, this consortium included six leading banks and the Korea Financial Telecommunications & Clearing Institute (KFTC). Since then, banks such as Hana Bank, IM Bank, and K Bank have joined, bringing participation to 11 institutions. BNK Financial Group, which owns Busan Bank and Kyongnam Bank, is the latest addition.
The banks aim to issue stablecoins individually, despite developing shared infrastructure. The current pause in central bank-led wholesale CBDC (Central Bank Digital Currency) trials is partly due to high costs and uncertain profit outlooks, while banks believe stablecoins could be more profitable in the short term.
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