BOK Approves KRW Stablecoin Pilot but Warns of USD-Pegged Token Demand Surge

Bank of Korea Governor Lee Chang-yong signalled openness to issuing a won-pegged stablecoin, noting he does not oppose its launch. He cautioned that a KRW-backed token could facilitate seamless swaps with dollar-pegged stablecoins, potentially boosting demand for USD tokens and complicating foreign exchange reserves management—already down from $415.6 billion in December to $404.6 billion in May. Newly elected President Lee Jae-myung is pushing the Digital Asset Basic Act, which would allow firms with minimum ₩500 million capital to issue fully reserved stablecoins after Financial Services Commission approval. Governor Lee stressed the need for a robust regulatory framework to mitigate risks to banking profitability and financial stability. Globally, stablecoins boast a combined market cap above $260 billion, with $253 billion tied to the dollar. Market leaders Tether (USDT) and Circle’s USDC hold $156 billion and $61 billion respectively, while euro-pegged EURC has jumped 156% year-to-date to $203 million. US lawmakers’ progress on the GENIUS Act further highlights the drive for regulatory clarity.