South Korea’s Stablecoin Regulation Sparks Jurisdictional Dispute Between FSC and BOK
South Korea's Financial Services Commission (FSC) is nearing completion of a stablecoin regulatory framework, with a bill expected to reach the National Assembly by end-2025. The proposed legislation has ignited a turf war between financial regulators, as the Bank of Korea (BOK) challenges the FSC's claim over oversight authority.
At stake is control over won-pegged stablecoins, with the central bank warning of systemic risks from private issuers. The BOK insists on direct licensing powers, while the FSC maintains stablecoins belong within its VIRTUAL asset regulatory domain. Five competing bills currently await parliamentary review.
Market participants watch closely as Korea's first stablecoin initiatives - KRWX and KRW1 - navigate the evolving landscape. "Most proposals envision licensing regimes for private issuers," notes fintech analyst Sejin Kim, highlighting the regulatory crossroads facing Asia's fourth-largest economy.
