South Korean Lawmakers Push Forward with Bill Establishing Won-Based Digital Currency Amid Growing Worry Over Dollar Hegemony
In a move to position South Korea as a key player in the global stablecoin market, the Democratic Party of South Korea is proposing legislation to enable won-denominated stablecoins. This legislative initiative is one of President Lee Jae-myung's key campaign pledges.
The bills, developed in coordination with the finance ministry, Bank of Korea (BOK), and Financial Services Commission, were drafted following the establishment of a stablecoin implementation task force after President Lee's inauguration. The task force's aim is to create a regulatory framework for stablecoins in South Korea.
President Lee's commitment to digital asset advancement is evident in his appointment of blockchain expert Kim Yong-beom as his chief policy aide. Kim, who previously led Hashed Open Research, the think tank of Korea's largest cryptocurrency investment firm, will play a crucial role in shaping the nation's digital asset policy.
The proposed legislation includes provisions for security token offerings and spot market exchange-traded funds backed by virtual assets. Another Democratic Party lawmaker, Ahn Do-geol, is preparing legislation focusing on won-currency stablecoin standards and qualifications.
Ahn's bills, to be submitted next week, mandate that issuers hold collateral equivalent to the full value of issued cryptocurrencies and strengthen oversight by the Bank of Korea and Ministry of Economy and Finance. Ahn emphasises the need for the Bank of Korea to maintain financial stability and for the finance ministry to have a legal foundation to exercise its authority over stablecoins.
The legislative approach creates a two-pronged strategy: Ahn's bills focus specifically on institutionalizing Korean won-based stablecoins, while Min Byung-deok's legislation serves as a broader framework covering the entire digital asset ecosystem, including stablecoins. Min introduced three bills for the stablecoin legislation.
The urgency facing Korean policymakers is highlighted by the potential dominance of dollar stablecoins in the global digital finance landscape. The US Congress has passed the Guiding and Establishing National Innovation for US Stablecoins (GENIUS Act), bringing cryptocurrencies into mainstream regulation and boosting demand for US Treasuries.
The specific person who submitted legislative proposals in South Korea to enable the introduction of won-based stablecoins is not named in the search results. However, the South Korean Financial Services Commission (FSC) has announced that a comprehensive bill regulating stablecoins, presumably including won-backed stablecoins, will be submitted to the legislature for review in October 2025.
If passed, both Ahn and Min's bills are expected to pass through the National Assembly within the year, setting up South Korea as a potential competitor in the global stablecoin market currently dominated by US dollar-pegged cryptocurrencies.
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