South Korea Accelerates Won-Backed Stablecoin Regulation
South Korea’s Financial Services Commission (FSC) is accelerating phase two of its Virtual Asset User Protection Act, unveiling comprehensive won-backed stablecoin regulation set for proposal by October 2025. At a Seoul press conference, Chairman Lee Eog-weon outlined three guiding principles: alignment with international standards, support for innovation with safety measures, and integrated safeguards across finance, industry and technology. The stablecoin regulation framework imposes clear collateral and reserve requirements, regular audits, transparency measures, and consumer protections such as redemption guarantees and interoperability with traditional finance. These won-backed stablecoin regulations aim to prevent capital flight, ensure monetary stability and bolster financial sovereignty, positioning South Korea as a global leader in digital finance. Ongoing industry consultations will refine the guidelines ahead of the rollout.
Bullish
The accelerated won-backed stablecoin regulation enhances legal clarity and consumer protections, likely boosting market confidence in Korean stablecoins. In the short term, issuers may adjust collateral and compliance processes, causing moderate volatility. Over the long term, clear reserve requirements, audits and interoperability measures support stablecoin adoption, trading volumes and liquidity, making this a bullish catalyst for the crypto market.