Stablecoin Regulation: S Korea Aims to Curb Dollar Reliance

South Korea’s Financial Services Commission (FSC) will submit a stablecoin regulation bill to the National Assembly in October. The framework marks the second phase of the Virtual Asset User Protection Act and sets clear issuance rules, collateral requirements and internal controls for won-pegged stablecoins. The proposed stablecoin regulation also addresses non-bank issuers and potential banking joint ventures. By targeting USDT and USDC, which dominate 99.8% of the $266.7 billion stablecoin market, regulators aim to bolster monetary sovereignty and reduce dollar dependence. Major banks—including KB Kookmin, Woori, Shinhan and Hana—are preparing stablecoin services and have held talks with Circle on USDC collaboration. Bank of Korea governor Lee Chang-yong has urged that only licensed banks issue won coins, and the bill will enforce strict issuer requirements. Similar measures are emerging in Japan and the US, highlighting a global shift in digital asset regulation. Traders can expect increased liquidity, clearer compliance standards and reduced regulatory uncertainty.