South Korea’s Bank-First Stablecoin Strategy Under Fire
The Bank of Korea’s push to make banks the main stablecoin issuers is getting slammed—and honestly, it’s a mess. Dr. Sangmin Seo from the Kaia DLT Foundation isn’t holding back, calling out the central bank’s logic as pure nonsense. He argues that just because banks follow old rules doesn’t mean they’re fit for stablecoins. Seriously, the BOK keeps harping on about capital and anti-money laundering, but that’s just a weak excuse to block real innovation.
Global Regulatory Comparisons
Let’s break it down: the BOK wants a bunch of bureaucrats to decide who can issue stablecoins. Meanwhile, the rest of the world is racing ahead with open competition. Sure, stablecoin risks are real, but this protectionist garbage is killing South Korea’s chances. On that note, look at the EU’s MiCA—it lets multiple players in with tough rules, and the US GENIUS Act encourages diversity. Japan even allows non-banks to issue, proving it can work. China shut down Ant Group and JD.com in Hong Kong, but Japan’s JPYC shows non-banks can thrive. You know, it’s arguably true that South Korea is stuck in the past while others move forward.
While the central banks’ concerns about stablecoin risks are understandable, its argument for banks leading a rollout seems to lack a logical foundation.
Dr. Sangmin Seo
The Case for Inclusive Stablecoin Regulation
Clear rules for everyone—that’s the only way South Korea won’t get left behind. Dr. Seo nails it: set guidelines that cut risks but let banks and non-banks compete fairly. After all, tech geniuses aren’t always in suits. Anyway, inclusive frameworks just work better. The EU demands full collateral and audits without picking favorites, and the US pushes for 1:1 reserves with competition. Brazil’s stablecoin market handles over $318 billion a year thanks to solid rules. Circle’s deal with Deutsche Börse and big Ethereum ETF flows show that clarity builds trust—no surprise there.
It would be even more valuable if the Bank of Korea could provide guidelines on how these risks can be mitigated and what qualifications are required for an issuer to be regarded as trustworthy.
Dr. Sangmin Seo
The Yield Debate: Balancing Innovation and Stability
The BOK’s plan to ban stablecoin interest is another dumb move—it’ll crush adoption. They whine about competition with bank deposits, but come on, that’s just fear talking. The American Bankers Association echoes this, yet industry leaders fight back hard. Kraken’s CEO Dave Ripley asks who really loses here, and he’s got a point. Stablecoin yields hit 5%, blowing past the 0.6% U.S. savings rate, so people flock to them. Anyway, the US bans direct yield but allows workarounds, the EU focuses on protection, and Japan skips yield for stability. Synthetic stablecoins like Ethena‘s USDe prove innovation finds a way, hitting $12 billion in market cap.
While I agree that stablecoins themselves should not include any yield-bearing features, I believe it would be excessive to restrict the generation of additional yield through the use of stablecoins.
Dr. Sangmin Seo
South Korea’s Evolving Stablecoin Landscape
Despite the BOK’s nonsense, South Korea’s stablecoin scene is exploding. Eight big banks plan won-pegged launches in late 2025 and early 2026—talk about momentum! Naver Financial’s push to buy Dunamu and launch a stablecoin shows market forces don’t care about red tape. Politics are shifting too, with President Lee Jae-myung backing crypto laws. Honestly, this tension between innovators and regulators is a goldmine if handled right. Japan’s banking consortium and China’s crackdown highlight the extremes, but South Korea could lead if it drops the bank obsession.
Doing so would significantly limit their utility and adoption; therefore, I think allowing supplementary yield creation should be permitted.
Dr. Sangmin Seo
Global Regulatory Divergence and South Korea’s Position
Globally, stablecoin rules are all over the place, and South Korea’s bank-first stance is laughably conservative. The EU’s MiCA harmonizes with strict reserves, the US’s GENIUS Act fuels competition, and Japan licenses non-banks too. Federal Reserve Governor Christopher Waller says gradual adoption works best, not drastic moves. The European Systemic Risk Board wants to ban cross-border multi-issuance coins, addressing real risks instead of blocking progress. You know, South Korea’s rigid approach might backfire, pushing innovation underground or overseas.
We think the forecast doesn’t require unrealistically large or permanent rate dislocations to materialize; instead, it relies on incremental, policy-enabled adoption compounding over time.
Federal Reserve Governor Christopher Waller
Institutional Engagement and Market Transformation
Big players are diving into stablecoins for efficiency and strategy—this isn’t just crypto bros anymore. Clear rules from MiCA and GENIUS Act draw them in, reducing uncertainty. Citigroup’s investment in BVNK and Circle’s partnerships with Mastercard and Finastra show Wall Street is all in. Japan’s banks focus on corporate payments, Europe on compliance, and the US on tech edges. It’s arguably true that as institutions adopt stablecoins, the whole system gets better, cutting costs and risks for everyone.
We’re planning to advance the use of regulated stablecoins across Europe’s market infrastructure—reducing settlement risk, lowering costs, and improving efficiency for banks, asset managers and the wider market.
Jeremy Allaire
Future Outlook for South Korea’s Stablecoin Ecosystem
South Korea’s stablecoin future hinges on regulators not screwing it up. With political support growing, inclusive rules could unlock massive growth—global projections hit $4 trillion by 2030. Japan’s aiming for 10 trillion yen in issuance, showing what’s possible. Overly strict policies might backfire, driving innovation away. Tech like cross-chain platforms and zero-knowledge proofs will evolve regardless, so South Korea better adapt fast.
The real regulatory concern is, who has the ultimate right of coinage — the central bank or any private companies on the market?
Source familiar with discussions
Expert analysis backs this up: Dr. Kim Min-ji, a fintech professor, says, “The bank-first approach ignores global trends and tech realities. A balanced framework would boost Korea’s digital economy—no doubt about it.”
