South Korea’s new administration plans to permit the issuance of stablecoins pegged to the national currency. This move aims to bolster the country’s independence from foreign assets, reports The Block.
Min Byung-duk, a lawmaker responsible for digital assets in President Lee Jae-myung’s campaign team, has already proposed a bill for licensing stablecoin issuers. According to him, this will reduce reliance on the US dollar.
Byung-duk emphasized that the use of stablecoins based on the American currency is directly linked to capital outflow. In his view, the initiative will bring economic benefits: reducing trade costs, diversifying currency risks, and increasing global investments in the local economy.
The goal is to create an environment where private companies can issue stablecoins, and various market participants, including content creators, game developers, and e-commerce platforms, will actively use them.
Criticism
Some industry experts have questioned the effectiveness of the initiative.
“Won-based stablecoins will not solve the problem of capital outflow—they may even accelerate it. Unlike the dollar, the Korean currency is not globally recognized. Issuing such a stablecoin will not create international demand for it,” said SmashFi co-founder and CEO Brian Hung-jong Paik.
He added that the initiative could have unpleasant consequences, exposing the country’s monetary system to speculative use in global crypto markets. The expert also sees a risk that stablecoins could become a “proxy-CBDC” and open the door to financial censorship.
Instead of promoting won-based stablecoins, Paik suggested South Korea follow El Salvador’s path by creating a national reserve in the first cryptocurrency.
“Bitcoin is the only truly neutral, censorship-resistant, and globally liquid digital asset,” he noted.
Authorities’ Position
Byung-duk acknowledged that the won is not among the world’s major currencies but claims there is “real demand” for stablecoins pegged to it. He links this to the global expansion of Korean content, games, and e-commerce services.
The lawmaker drew a clear line between private “stablecoins” and CBDCs. According to him, token issuance will be carried out exclusively by the private sector and determined by market demand. However, basic requirements for reserve disclosure and issuer registration are “inevitable” to comply with international AML/CFT standards.
In April, the central bank announced its intention to “actively participate” in creating legislation regulating stablecoins.