The Bank of Korea doesn’t want to give stablecoins the green light! It reiterates that banks should take the lead and boosts the deposit token pilot further with an additional round.

The Bank of Korea (BOK) reiterated to the National Assembly's Finance Committee on Thursday that Korean won stablecoins should be issued primarily by a "bank-led consortium," and proposed the establishment of a statutory policy coordination mechanism. It also announced the expansion of "deposit token" pilot projects in the second half of the year, to be applied in scenarios such as government subsidies, vouchers, and electric vehicle charging payments, highlighting the long-standing disagreement between the central bank and the industry over the issuing entity.

(Previous context: South Korea's "Stablecoin Act" is expected to be delayed until after the June elections! Democratic Party lawmakers: Optimistic that legislation will ultimately pass) (Background supplement: South Korea's largest financial group KB completes Korean won stablecoin payment verification: cross-border remittances compressed to 3 minutes via Kaia, transaction fees reduced by 87%)

Table of Contents

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• Launching Deposit Tokens on Its Own
• Digital Asset Basic Act Stalled
• What Does the Bank-Led Consortium Look Like?

Key Summary

• The Bank of Korea reiterates that stablecoins must be issued by a bank-led consortium, calling for a statutory policy coordination mechanism
• Expanded deposit token pilot in the second half of the year, covering government subsidies, vouchers, and EV charging payments
• Dispute over issuing entity unresolved, Digital Asset Basic Act legislation continues to be delayed

While South Korean political circles are still arguing over "who can issue stablecoins," the central bank has once again stated its position before the National Assembly. The Bank of Korea (BOK) submitted its latest opinion to the National Assembly's Finance Committee on Thursday, reiterating that Korean won stablecoins should be issued preferentially by a "bank-led consortium," and recommended establishing a "statutory policy coordination mechanism" involving relevant regulatory bodies. Simply put, the Bank of Korea aims to lock the initiative firmly with banks through institutional mechanisms.

This is not the first time the Bank of Korea has made such a statement. It has repeatedly argued that stablecoin issuers must maintain bank holding status to ensure financial stability. However, this stance has consistently clashed with some political figures and industry institutions, and has been a major point of contention in South Korea's digital asset legislation.

Launching Deposit Tokens on Its Own

In tandem with its congressional opinion, the Bank of Korea announced that it will expand the "deposit token" pilot in the second half of the year, targeting application scenarios such as:

• Distribution of government subsidies
• Voucher payments
• Electric vehicle charging infrastructure payments
• Everyday transaction scenarios for the general public

In simple terms, a deposit token converts commercial bank deposits directly into on-chain tokens. The issuer is a bank, and the backing is real fiat currency—different from privately issued stablecoins. The Bank of Korea views this as an important direction for tokenized finance, essentially the central bank's version of a "stablecoin," but with a different issuer.

Digital Asset Basic Act Stalled

Due to prolonged disputes over core issues such as stablecoin issuance qualifications, the legislative process for South Korea's Digital Asset Basic Act continues to slow down. The bill, originally scheduled to advance in the first quarter of 2026, has now been delayed. Reasons include geopolitical conflicts involving the US, Israel, and Iran at the end of February, local elections, and a reshuffle of National Assembly committees.

In April of this year, the ruling Democratic Party proposed incorporating stablecoins and RWA (Real World Asset tokenization) into the existing financial regulatory framework, attempting to regulate new things with existing tools. However, the question of who should be the issuing entity—the central bank wants banks to do it, while industry and some lawmakers want to open the door to more players—remains unresolved, keeping the bill stuck.

Currently, the Digital Asset Basic Act has been delayed for nearly a year, with the biggest controversy being "who can issue stablecoins."

What Does the Bank-Led Consortium Look Like?

The "bank-led consortium" proposed by the Bank of Korea this time refers to a consortium formed by multiple banks to jointly issue stablecoins, rather than allowing tech companies or cryptocurrency exchanges to issue coins independently. The opinion did not provide specific answers regarding which banks can participate, how the consortium would be divided, or how regulators would intervene in the "statutory policy coordination mechanism," leaving these for subsequent congressional discussions.

Considering that KB Financial Group, South Korea's largest financial group, previously completed verification of Korean won stablecoin payments, compressing cross-border remittance time to 3 minutes and reducing fees by 87% via Kaia, it is easy to understand why the banking camp is actively positioning itself. Once this pie is opened, whoever gets in first will reap the benefits.

Frequently Asked Questions

Why does the Bank of Korea oppose privately-led stablecoin issuance?

The central bank argues that stablecoin issuers should maintain bank holding status to ensure financial stability. Non-bank institutional control could pose regulatory and settlement risks, which is the core of its long-standing disagreement with political circles and the industry.

What is the difference between deposit tokens and privately issued stablecoins?

Deposit tokens are created by commercial banks by tokenizing deposits directly. The issuer is a bank, and they are backed by real deposits. Privately issued stablecoins are mostly issued by tech companies or exchanges, and their regulatory and guarantee mechanisms are different.