The US didn’t just validate crypto; it allowed the big boys to place big bets on the industry. Spot Bitcoin and Ethereum ETFs were gamechangers. The GENIUS Act came, and now, everyone is watching closely. Among them is South Korea.
If you remember well, South Korea banned crypto ICOs back in the day and took a more restrictive approach to holding some of the best cryptos to buy. Licensing for operators is mandatory. It has been good for holders, but proper legislation on stablecoins is the next big step. For beginners, stablecoins are designed to track prthe ices of real-world assets. Common and liquid stablecoins like USDT and USDC track the greenback, allowing everyone to get exposure in
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and even the next 100X coins.
Unfortunately, it has been revealed that South Korea has hit pause on its next big crypto law after regulators failed to agree on who should issue won-backed stablecoins. The stalemate comes as stablecoin trading in Korea keeps growing, with local users moving tens of billions of dollars through crypto rails each year.
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South Korea and Stablecoins: Why it Matters
In South Korea, stablecoins already act as on-ramps into global crypto markets.
According to Chainalysis, Korean won–based stablecoin purchases hit about $64Bn in the year through June 2025. That scale gets the attention of central banks.
🇯🇵Japan and South Korea🇰🇷 lead Asia's local stablecoin charge in 2025
TLDR: Regulators and crypto firms in Asia drove the growth of domestic, non-USD stablecoins in 2025 as an alternative to dollar-pegged options.
Details: According to reports, Asian countries like Japan and… pic.twitter.com/Ps5ahlTCT5
— Hush (@HushWealth) January 5, 2026
The Bank of Korea (BoK) worries that private digital money can affect capital flows and currency control.
That is why it wants banks firmly in charge from day one.
What’s preventing “Phase 2” from preceding is simple: BoK wants only bank-led groups to issue stablecoins, with banks owning at least +51%.
Their argument is that if banks take charge, their compliance with clear financial laws in the country would, in the future, prevent bank runs.
The idea is control first, growth later.
On the other hand, the Financial Services Commission (FSC) disagrees.
They are pushing for a more flexible model.
It says fintech firms and payment apps can issue stablecoins if they meet strict reserve and redemption rules. Lawmakers worry a bank-only model blocks competition and slows consumer-friendly products.
This is not a small policy detail. If banks dominate issuance, expect slower rollouts but tighter supervision. If fintechs join, expect faster adoption and more user choice.
The good news is that the government is not abandoning the project altogether. A resolution is expected sometime in Q1 2026.
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Is This Roadblock Good or Bad? USD Stablecoins Gaining Momentum
The push and pull, delays, and other obstacles allow the USD to dominate even more.
As BoK stands in the way, the US has the GENIUS Act, which has clarified what is needed for any bank or Fintech to issue digital dollars.
Already, Circle, the issuer of USDC, is increasing its market share as its stablecoin continues to enable transfers and payments, not only in the US but across the world.
Meanwhile, Tether, the issuer of USDT, the world’s largest USD-pegged stablecoin by market cap, is powering Won trading on major exchanges like Bithumb.
The longer the BoK delays, a tradeoff is created, disadvantaging the Won.
Naturally, Korea gets less visibility into stablecoin flows, while users rely on issuers outside local law.
It also slows homegrown projects that want clear rules before launch.
Companies like Toss and major banks are preparing products but cannot ship them yet.
Time keeps ticking.
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