FSC Moves Toward Stablecoin Regulation
South Korea’s Financial Services Commission (FSC) is preparing a government bill that will provide a legal framework for stablecoins, with the proposal set to be unveiled in October 2025. According to a report by local outlet MoneyToday, the initiative forms part of the second phase of the Virtual Asset User Protection Act, aimed at strengthening oversight of the nation’s rapidly growing digital asset market.
Democratic Party of Korea Representative Park Min-kyu confirmed after a policy debate that he had been briefed by regulators. “The government bill is expected to be submitted to the National Assembly around October,” Park said, noting that the FSC intends to establish guidelines covering issuance, collateral management, and internal control systems for stablecoins.
Reducing Reliance on the Dollar
One of the main drivers behind the initiative is the need to reduce dependence on dollar-pegged stablecoins that currently dominate global markets. Data from RWA.xyz shows that out of the $266.7 billion stablecoin market, 99.8%-roughly $266.3 billion-is denominated in U.S. dollar-backed tokens.
By introducing a won-pegged stablecoin, South Korea hopes to create an alternative that strengthens its domestic financial system while also giving local banks and fintech firms more flexibility in digital finance. The push gained momentum after President Lee Jae-myung pledged support for the idea during his election campaign, making it a political as well as an economic priority.
Competing Proposals from Lawmakers
The FSC’s bill will not be the first proposal in parliament. Lawmakers from across the political spectrum have already introduced several drafts, including:
- The Digital Asset Basic Act by Representative Min Byung-deok
- The Act on the Issuance and Circulation of Value-Stable Digital Assets by Representative Ahn Do-gul
- The Act on Payment Innovation Using Value-Pegged Digital Assets by Representative Kim Eun-hye
These overlapping initiatives signal both the urgency and complexity of creating a domestic stablecoin framework. Local industry groups have also pressed for action, warning that without a clear legal foundation, South Korea risks falling behind other jurisdictions such as the United States, where stablecoin regulation is advancing quickly.
Banks Prepare for Won-Pegged Tokens
The urgency is further reflected in the private sector. In June 2025, a consortium of major South Korean banks announced a joint project to develop a won-pegged stablecoin, with a launch expected in late 2025 or early 2026. The banks said the token would not only provide an alternative to U.S. dollar dominance but also ensure currency stability in the digital era.
Industry insiders believe the framework could unlock opportunities in real-world asset (RWA) tokenization, cross-border payments, and decentralized finance applications, especially as Seoul positions itself as a leader in fintech regulation in Asia.
Tax Authorities Target Crypto Evasion
Meanwhile, South Korea is tightening enforcement around crypto usage. On Monday, tax officials in Jeju City began freezing and seizing digital assets from nearly 3,000 residents suspected of evading about $14.2 million in taxes. Authorities are investigating whether individuals in arrears are hiding assets in crypto wallets to avoid government scrutiny.
The tax crackdown underscores how South Korea is taking a dual approach: encouraging innovation through a stablecoin framework while clamping down on illegal use cases. This balance will likely shape the public perception and adoption of a future won-pegged stablecoin.
Looking Ahead
With the FSC’s bill expected in October, South Korea is preparing to take a decisive step in shaping the next chapter of its digital economy. If passed, the legislation could pave the way for a state-backed stablecoin, reduce reliance on the U.S. dollar, and give the country an edge in the regional race to regulate and integrate digital assets.
As lawmakers and regulators work out the details, the world will be watching to see if South Korea can transform its stablecoin ambitions into a trusted, compliant financial product that serves both domestic and international markets.
