Bank of Korea Establishes New Crypto Asset Division Amid Growing Local Stablecoin Interest
July 29, 2025 — In a significant move reflecting South Korea’s increasing focus on digital currencies, the Bank of Korea (BOK), the nation’s central bank, has created a dedicated virtual asset division within its Financial Payment Systems Bureau. This newly formed unit aims to closely monitor developments in the cryptocurrency market and lead internal discussions concerning legislation related to crypto assets, particularly stablecoins denominated in South Korean won.
The establishment of the virtual asset division marks an important strategic shift for the BOK as it responds to mounting momentum surrounding local stablecoins. According to a report by South Korean news agency News1, the division will spearhead efforts to understand and potentially regulate Korean won-based stablecoins, a digital currency innovation gaining traction domestically.
In parallel, the central bank has renamed its existing Digital Currency Research Team to the Digital Currency Team. Observers interpret this change as a sign that the BOK is moving beyond theoretical exploration toward taking a more active role in developing digital currency initiatives. The Block has reached out to the Bank of Korea for further remarks on these developments.
Stablecoins Drive Policy Change Amid U.S. Developments
The discussion on stablecoins in South Korea has intensified alongside the international trend. Notably, the United States’ endorsement of USD-backed stablecoins during President Donald Trump’s tenure has added urgency for South Korea to develop its own regulatory framework and stablecoin ecosystem.
South Korea’s recently elected President, Lee Jae Myung, has publicly committed to fostering a local currency-based stablecoin market. He views such a market as a key measure to prevent capital flight from the country. Reflecting this policy direction, a lawmaker from the ruling party has submitted legislation proposing a foundational regulatory framework specifically for KRW-backed stablecoins.
Private Sector Follows Suit
The momentum is not confined to government initiatives. Major South Korean banks and payment service providers have reportedly submitted trademark applications for stablecoin ticker symbols, indicating strong private sector interest in engaging with the digital currency space.
Central Bank’s Stance on CBDC and Stablecoins
Previously, the Bank of Korea was actively pursuing the development of a central bank digital currency (CBDC). However, reports indicate that the BOK has decided to temporarily pause its CBDC project amid the rising prominence of stablecoins in the market.
Lee Chang-yong, governor of the Bank of Korea, has publicly acknowledged the need for won-based stablecoins but has warned against allowing non-banking institutions to issue such assets, cautioning that it could lead to financial instability or market chaos.
The Bank of Korea’s establishment of a crypto asset division alongside shifts in digital currency teams highlights the country’s evolving approach toward crypto regulation and digital currency innovation. As South Korea navigates the challenges and opportunities posed by stablecoins and other virtual assets, these institutional changes hint at a regulatory landscape that could solidify the country’s position as a regional hub for digital finance.
This article was originally reported by Danny Park for The Block. Danny Park covers Web3 and crypto regulations in East Asia and is based in Seoul.
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