South Korea’s Financial Services Commission is pushing to formalize a regulatory structure for won-denominated stablecoins through a policy consultative body that would also include the Bank of Korea and the finance ministry.
The review now under discussion covers the basic legal architecture for local-currency stablecoins, including reserve requirements, redemption stability, customer-asset protection, and oversight of how tokens circulate after issuance.
Interagency body proposed
According to the source report, the FSC wants a consultative mechanism centered on the financial regulator, the finance ministry, and the central bank to coordinate policy on won-backed stablecoins. The aim is to institutionalize the sector through a shared framework rather than leave responsibilities fragmented across agencies.
The proposed division of roles would assign different policy areas to different authorities. These include issuance approval, user protection, anti-money laundering controls, payment and settlement matters, and monetary and foreign-exchange policy.
Core legal safeguards under review
The FSC is reviewing legislation that would require issuers to hold sufficient reserve assets and maintain a stable redemption system. The package under consideration also includes rules on segregating assets and building bankruptcy-remote protections into the structure.
Experts cited in the report support a framework that sets standards for issuer licensing, reserve-asset management, redemption procedures, and AML compliance. Another key element being considered is a legal separation between customer assets and issuer assets, alongside measures to protect redemption rights even if an issuer becomes insolvent.
Focus extends beyond issuance
The policy discussion is not limited to who can issue a won stablecoin. The report says there is particular emphasis on managing the distribution stage after issuance, an area that would affect how tokens are handled across the broader market.
That includes defining standards for tracking and managing transfers when stablecoins move between exchanges, custodial wallets, and non-custodial wallets controlled by users. In practice, this points to oversight that would follow the token after minting, not just at the point of launch.
Next step is coordinated rulemaking
No final law or completed framework was described in the report. What is confirmed is that the FSC is seeking a formal channel with the Bank of Korea and the finance ministry as it reviews how won-denominated stablecoins should be regulated.
The immediate next step, based on the information available, is the creation of that interagency consultative body and continued examination of legislation covering reserves, redemption, asset segregation, bankruptcy safeguards, and distribution-stage controls.
Source: en.bloomingbit.io