South Korea’s FSC Seeks BOK, Finance Ministry Participation in Won Stablecoin Legislation Through Interagency Consultative Body

South Korea’s Financial Services Commission is seeking to create a policy consultative body involving the Bank of Korea and the finance ministry as it moves to institutionalize won-denominated stablecoins.

According to News1 on Sept. 29, Yoo Won-kyu, an official in the FSC’s virtual asset division, said lawmakers are discussing a bill in a way that would establish a consultative body among relevant agencies. He made the remarks at a forum hosted the same day by Democratic Party lawmaker Kim Hyun-jung titled “Future Governance of Won Stablecoins and Ways to Build a Market Ecosystem Through Overseas Cases.”

“There appears to be broad agreement that a consultative body involving the FSC, the finance ministry and the Bank of Korea is needed,” Yoo said. Authorities are discussing legislation that would allow the body to be formed so related policies can be closely coordinated. He said such coordination is needed because stablecoins could affect not only financial markets, but also monetary and foreign-exchange policy.

The FSC is preparing legislation to regulate digital-asset businesses, the market and users more broadly, while also reviewing a framework for won stablecoins. Given the nature of stablecoins, whose value is linked to fiat currencies, the regulator is focusing on requirements for sufficient reserve assets and a stable redemption system.

Lawmakers are also reviewing measures to separate customer assets and shield them in the event of an issuer bankruptcy. The idea is to distinguish an issuer’s own assets from reserve assets that must be used to redeem users, while protecting users’ redemption rights even if the issuer goes bankrupt. Yoo said the U.S. GENIUS Act and the European Union’s Markets in Crypto-Assets regulation, or MiCA, also focus on establishing clear regulatory frameworks.

Experts at the forum also stressed the need for a system covering everything from licensing standards for issuers to reserve-asset management, redemption procedures and anti-money laundering, or AML. Kang Hyun-gu, a lawyer at Lee & Ko, proposed a consortium model centered on banks and joined by fintech and big tech companies. He also said reserve assets should be legally separated from an issuer’s own assets and that won redemption rights and related procedures should be clearly defined.

Lee Jung-doo, a researcher at the Korea Institute of Finance, proposed using a consultative body centered on the FSC and joined by the finance ministry and the Bank of Korea, rather than creating a separate supervisory agency. The FSC and the Financial Supervisory Service would handle issuance approval and user protection, while the Korea Financial Intelligence Unit would oversee AML. The Bank of Korea and the finance ministry would be responsible for payment and settlement and monetary policy, and foreign-exchange policy, respectively. That makes coordination among the agencies important.

Speakers also raised the need to manage the distribution stage after issuance. Kim Young-seok, chief executive of Bonanza Factory, said specific standards are needed on how far authorities should track and manage transactions when stablecoins move from exchanges or custodial wallets to non-custodial wallets directly controlled by users. He said who monitors those wallets, and to what extent, could become a key factor in determining how won stablecoins are used in practice.