Although South Korea’s central bank has historically approached digital currencies with caution, recent organizational and regulatory shifts indicate a more proactive stance toward managing the multifaceted risks associated with cryptocurrencies. The Bank of Korea (BOK) has redefined its internal structure to shift from mere research toward operational oversight. Notably, the Digital Currency Research Lab was renamed the Digital Currency Lab as of July 31, 2025, signaling a strategic pivot. This lab now operates under the Financial Settlement Bureau with a dedicated unit specifically tasked with monitoring digital tokens, especially stablecoins pegged to the Korean won. These changes reflect an intent to closely supervise the evolving digital asset landscape.
South Korea’s central bank shifts from research to active oversight of digital currencies, focusing on won-pegged stablecoins.
The BOK has further established specialized teams—the Virtual Asset Team and separate divisions focused on Digital Currency Technology and Infrastructure. These groups collaborate with the Financial Settlement Bureau to monitor price fluctuations, market dynamics, and pertinent legal developments concerning crypto assets. Their responsibilities extend to testing deposit token usage in payments and settlements, as well as evaluating any repercussions for traditional banking functions such as deposits and lending. This extensive organizational realignment underscores the central bank’s commitment to mitigating risks arising from the intersection of conventional finance and digital tokens. In parallel, South Korea is advancing regulatory frameworks targeting leveraged crypto lending, a sector that has seen rapid expansion.
The Financial Services Commission (FSC) and Financial Supervisory Service (FSS) have formed a task force including representatives from major exchanges and industry alliances. The forthcoming guidelines, expected by August 2025, aim to impose leverage caps and establish eligibility criteria for users, while mandating enhanced risk disclosures and transparency. These measures respond directly to emerging services from platforms like Upbit and Bithumb, which offer leverage up to four times collateral, exposing retail investors to amplified volatility and potential losses. The task force’s guidelines will also address user eligibility and transparency to strengthen investor protection.
Simultaneously, the BOK is intensifying oversight of stablecoins, particularly those denominated in won. Legislative initiatives empower the FSC with broad licensing and supervisory authority over issuers, reflecting a dual objective: safeguarding consumers and promoting innovation. However, concerns persist regarding the potential erosion of monetary policy control. Despite these challenges, major banks are preparing to launch won-pegged stablecoins by 2025 or 2026, with the BOK’s support, aiming for a bank-led rollout that balances innovation with regulatory safeguards.
In tandem, the central bank’s Central Bank Digital Currency (CBDC) program faces delays. The BOK postponed trials in June 2025, citing regulatory uncertainties and apprehensions from domestic banks. The rebranding of CBDC units to emphasize business-driven development rather than research signals readiness to resume testing once legal frameworks stabilize. The ongoing evaluation centers on integrating CBDCs with existing payment and settlement infrastructures, highlighting the cautious but deliberate approach the BOK adopts toward digital currency innovation amid regulatory complexities.
