South Korea’s central bank is moving to consolidate control over the digital money sector. In a challenge to global crypto deregulation trends, the Bank of Korea (BoK) is urging lawmakers to confine the issuance of won-denominated stablecoins exclusively to commercial banks.
Bank Of Korea Seeks Stablecoin Monopoly For Legacy Lenders
23 February 2026 - 15:30 CET
By Sandmark staff
By attempting to restrict private crypto firms from the market, the central bank is highlighting the ongoing tension between legacy finance and decentralized alternatives.
Building a regulatory moat
In a report submitted to the National Assembly this week, the BOK argued that permitting only fully licensed banks to underwrite these digital tokens would mitigate money laundering and financial stability risks, according to Bloomberg. The tokens aim to maintain a fixed value relative to the fiat won, but the central bank remains hesitant to allow private technology companies to manage them. This stance comes as countries worldwide attempt to balance digital innovation with systemic risk, though the BOK's approach leans heavily towards protecting the established banking sector.
Asian regulators tighten oversight
Bank regulators across Asia have been particularly cautious regarding permissionless innovation. The Hong Kong Monetary Authority (HKMA) brought a comprehensive licensing regime into effect under its Stablecoins Ordinance in Aug 2025. The framework requires any issuer of fiat-referenced stablecoins to obtain strict regulatory approval and meet stringent governance standards.
Under this highly supervised regime, licensed issuers must sustain robust reserves and implement transparent redemption mechanisms. While the HKMA frames this as consumer protection, the practical result is a significant compliance barrier that primarily favours the most heavily capitalized traditional players.
The global fight for monetary control
Hong Kong’s approach parallels similar efforts in the US and the European Union, where lawmakers are actively debating how to enfold stablecoins into existing financial infrastructure without compromising their monetary policy sovereignty. In the US, the recent signing of the GENIUS Act into law by President Donald Trump sought to clarify federal oversight of the sector. It reflects a bipartisan concern in Washington regarding the potential for private digital money to undercut the traditional banking system, even as policymakers acknowledge stablecoin utility in cross-border payments.
The BOK’s insistence on bank-centric issuance underscores a broader global reality. Regulators and central banks are balancing the promise of stablecoins for financial inclusion with a clear desire to ensure that the core infrastructure of digital finance remains under the influence of the institutions they already supervise.
