South Korea’s debate over a won-backed stablecoin has moved well beyond the proposal made by Lee Jae-myung during the 2025 election campaign.
Lee, who was then the Democratic Party leader, argued that a stablecoin tied to the Korean won could help keep more digital-asset activity inside South Korea. He also linked the idea to the country’s monetary sovereignty and the use of dollar-based stablecoins.
Speaking at a policy forum, Lee said a domestic stablecoin could reduce the need for Koreans to rely on foreign digital currencies such as USDT and USDC. Lee is now president after winning the June 2025 presidential election.
The stablecoin plan is still being debated
The basic idea is simple. A won stablecoin would be a digital token designed to keep a value close to one Korean won. Users could use it for payments, trading, remittances and other digital transactions.
Lee’s wider digital-asset platform also called for spot crypto ETFs and more institutional access to digital assets. Both Lee and his political rival, Kim Moon-soo, had also expressed support for spot crypto ETFs during the 2025 election period according to a post by Cryptoquant founder.
All three major South Korean presidential candidates support #Bitcoin ETFs and institutional investment.
Currently, Bitcoin ETFs and institutional investments are banned in Korea. 100% volume comes from retail. https://t.co/hL6cKci5VK
— Ki Young Ju (@ki_young_ju) May 14, 2025
However, the legal picture has changed since the original report. South Korea has not yet created a final legal framework for issuing won-backed stablecoins. The Financial Services Commission said in January 2026 that key parts of the proposed Digital Asset Basic Act, including who could issue stablecoins, had not been decided.
That debate remains active in October 2026. Recent reports say lawmakers and regulators are still discussing who should be allowed to issue won stablecoins and how they should be supervised.
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Banks are preparing while lawmakers work on the rules
The delay has not stopped companies from testing the technology. South Korean banks and financial groups have been preparing possible won-stablecoin services. Some are also looking at cross-border payments and remittances as possible uses.
One example is BDACS, which has developed KRW1, a won-pegged token. The company has said it is working on stablecoin-based trade settlement and has also launched KRW1 on Circle’s Arc network.
At the same time, questions about who should control issuance remain important. A January 2026 proposal from the ruling Democratic Party discussed a bank-led model, but lawmakers did not reach agreement on the bank ownership rules.
The debate is not only about crypto. A won stablecoin could affect payments, banks, foreign exchange and the movement of money across borders.
Supporters see a local stablecoin as a way to keep won-based digital payments inside the country. Critics and regulators have focused on issues such as reserves, redemption, money laundering and financial stability. A stablecoin must have enough safe assets behind it if users are expected to exchange it back for ordinary won.
South Korea has also made progress on other parts of its digital-asset rules. The National Assembly passed legislation for security tokens in January 2026, with the new framework expected to take effect in 2027.
The stablecoin rules are moving more slowly. Recent reports say the government and lawmakers are still working on the Digital Asset Basic Act, with disagreements over issuance and supervision delaying progress.
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