Bank of Korea Backs Phased, Bank-Led Rollout of Stablecoins

Korea is taking a more cautious approach due to concerns about financial stability and foreign exchange impacts. In Japan, the Financial Services Agency is proposing to reclassify cryptocurrencies as financial products, paving the way for crypto ETFs and introducing a flat 20% tax rate to attract more investors as part of its “New Capitalism” plan. Meanwhile, Turkey is moving to tighten crypto regulations with mandatory transaction reporting, withdrawal delays, and transfer caps—especially on stablecoins—as part of its effort to combat illicit finance and align with global standards like MiCA. Bank of Korea Pushes Cautious Stablecoin Rollout The Bank of Korea is taking a cautious yet strategic approach to stablecoin adoption, according to deputy governor Ryoo Sangdai. In a press conference covered by Yonhap News, Ryoo suggested that South Korea should initially allow only commercial banks to issue a won-based stablecoin, especially due to their high level of regulation and the need to establish a safety net. He believes that this controlled rollout will help minimize potential risks to consumers and financial markets, with eventual expansion to the non-banking sector under consideration. Bank of Korea Deputy Gov. Ryoo Sang-dai Despite these proposals, the central bank is still quite wary of stablecoins. Ryoo raised concerns about how a widely used stablecoin could impact capital flows and potentially undermine the country’s stance on foreign exchange liberalization and the global role of the Korean won. He also pointed out that the introduction of stablecoins could accelerate financial sector restructuring, and even possibly pave the way for narrow banking models. Bank of Korea governor Rhee Chang-yong shared his very similar concerns at a separate press event earlier this month, and stated that while he doesn’t oppose a won-backed stablecoin, managing its foreign exchange implications would be challenging. Meanwhile, South Korea’s political landscape is also evolving around digital assets. On June 10, the ruling Democratic Party proposed the Digital Asset Basic Act, which would allow firms with at least $368,000 in equity to issue stablecoins. Additionally, the Bank of Korea is also advancing its central bank digital currency (CBDC) initiative as a direct countermeasure to private stablecoins. Ryoo confirmed that the current CBDC test phase is set to conclude on June 30, but future pilot phases will depend on inter-agency and bank consultations due to ongoing legal and policy uncertainties. Globally, stablecoins are gaining traction. Visa recently partnered with African fintech firm Yellow Card Financial to push stablecoin adoption across the continent. In April, Russia’s finance ministry hinted at its own government-backed stablecoin plans, while major financial entities in Abu Dhabi revealed a collaborative project to develop a dirham-pegged stablecoin. Japan’s FSA Pushes Crypto Reform There are crypto developments in other parts of the world as well. In fact, Japan’s Financial Services Agency (FSA) proposed a major regulatory overhaul that could reshape the country’s crypto landscape. The proposal recommends reclassifying cryptocurrencies as financial products under the Financial Instruments and Exchange Act, placing them in the same category as traditional securities. This move will pave the way for the launch of crypto exchange-traded funds (ETFs) in Japan, which could align the country with global trends in institutional crypto investment. Alongside the reclassification, the FSA also proposed a flat 20% tax on crypto income, replacing the current progressive tax system that can reach rates as high as 55%. By offering tax treatment similar to that of stocks, the proposed change could attract a wider range of investors, both retail and institutional, and position crypto as a more viable long-term investment option. These reforms are part of Japan’s broader “New Capitalism” strategy, that is specifically aimed at encouraging an investment-driven economy. Chart showing Japanese crypto accounts surged past 12 million in 2025 Interest in digital assets is already on the rise in Japan. In January of 2025, over 12 million crypto accounts were active in the country, with platforms managing more than 5 trillion yen (approximately $34 billion) in assets. The FSA said that ownership of cryptocurrencies now surpasses participation in some traditional financial instruments, like foreign exchange and corporate bonds, particularly among younger, tech-savvy retail investors. The proposal also reflects Japan’s intent to keep pace with growing global institutional interest in crypto. The FSA pointed to data showing over 1,200 financial institutions—including US pension funds and major banks like Goldman Sachs—now hold US-listed spot Bitcoin ETFs. Japan’s regulators are keen to support similar developments at home. Japan is also exploring stablecoin adoption. In April, Sumitomo Mitsui Financial Group (SMBC), along with TIS Inc., Ava Labs, and Fireblocks, signed an agreement to commercialize stablecoins in the country. The initiative will focus on developing stablecoins pegged to both the US dollar and the Japanese yen, with potential use cases in the settlement of tokenized real-world assets like stocks, bonds, and real estate. This builds on Japan’s earlier move in March to grant its first stablecoin license to SBI VC Trade, a subsidiary of SBI Holdings, which is preparing to support Circle’s USDC. Turkey Tightens Crypto Rules Meanwhile, Turkey is set to introduce a series of stringent regulations to curb financial crimes involving cryptocurrencies. This is according to state-run Anadolu Agency. The new rules will require crypto platforms to collect detailed information about the origin and purpose of each transaction, including mandatory user-provided descriptions of at least 20 characters. In addition, withdrawal holding periods will be enforced when the Travel Rule does not apply, with standard withdrawals delayed by 48 hours and first-time withdrawals subject to a 72-hour delay. These measures are part of an initiative by the Ministry of Treasury and Finance to tighten oversight of crypto asset service providers (CASPs). As part of the effort, the ministry will also impose caps on stablecoin transfers, limiting users to $3,000 per day and $50,000 per month. However, platforms that meet full Travel Rule compliance—collecting verified identity information for both sender and recipient—will be allowed to operate with double these limits. Treasury and Finance Minister Mehmet Şimşek explained that the goal is to prevent illicit activity while preserving space for legitimate crypto use. He said that non-compliant platforms could face a range of sanctions, from administrative penalties to license revocation. Certain types of transactions, like those related to liquidity provision, market making, and arbitrage, will be exempt from these restrictions if the source of funds can be verified and monitored by the platforms involved. These new proposals are Turkey’s most comprehensive attempt yet to align its crypto regulations with international standards, including the European Union’s Markets in Crypto-Assets (MiCA) framework. In March, the Capital Markets Board (CMB) introduced a regulatory framework granting it authority over all CASPs. This framework includes rigorous licensing requirements covering executive qualifications, shareholder structures, and capital thresholds—$4.1 million for crypto exchanges and $13.7 million for custodians.

Source: Coinpaper