South Korea has renewed efforts to legalize stablecoins, aiming to reduce dependence on dollar assets and establish a local market.
Introduction to Stablecoin Legalization
Growing interest in stablecoin regulation globally has spurred South Korea, where the creation of domestic stablecoins has become a top economic priority for the Lee administration. The government aims to establish a licensed framework for issuers and reduce the country’s reliance on dollar-backed digital currencies.
Legislation as a Priority
Min Byeong-deok, a left-wing lawmaker and head of digital asset policy during Lee's campaign, has introduced legislation to create a licensing system and regulatory standards for companies looking to issue won-based stablecoins. "The use of dollar stablecoins is directly linked to capital outflows," Min noted, emphasizing that settlements in KRW could help retain domestic capital and reduce currency conversion risks.
Strategy for Economic Autonomy
The administration views this initiative as a strategic tool to bolster South Korea’s economic autonomy in the digital age. Min highlighted that local stablecoins could "reduce trade costs, diversify foreign exchange risks, and increase global investment into the local economy."
If enacted, the law would position South Korea as a global leader in sovereign-backed stablecoin innovation while strengthening its monetary independence in an increasingly blockchain-driven financial landscape.
