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Central Bank Forms Crypto Committee
South Korea’s central bank, the Bank of Korea (BOK), is taking decisive steps to reinforce its role in overseeing the rapidly evolving cryptocurrency industry. On July 30, the BOK announced it will launch a Virtual Asset Committee dedicated to monitoring the local crypto market and contributing to legislative discussions around virtual assets and stablecoins.
The move comes amid rising crypto activity in the country and growing policy interest from the government. According to Yonhap News, the Virtual Asset Team will work alongside other state institutions to regulate and supervise stablecoins, digital tokens, and virtual asset platforms.
A BOK official stated the team will play an active role in cooperative work with the government on crypto-related legislation. This includes helping draft frameworks that address issues such as stablecoin issuance, crypto exchange compliance, and consumer protections.
CBDC Teams Get New Roles
As part of this new oversight strategy, the Bank of Korea has renamed and repurposed several departments involved in digital currency research and development.
The former Digital Currency Research Team has been rebranded as the Digital Currency Team, a name change that reflects a shift from academic research toward practical application in central bank digital currency (CBDC) initiatives.
This team is now considered a business-centric department, with a stronger emphasis on real-world deployment and coordination with the financial sector.
In addition, two new support teams were created:
- The Digital Currency Technology Team will lead research into digital currency innovations.
- The Digital Currency Infrastructure Team will focus on building platforms for digital voucher management and deposit-token-based infrastructure.
These strategic changes indicate that BOK is preparing not just to study CBDCs, but to potentially deploy digital currency frameworks that could integrate with the country’s existing financial systems.
Stablecoins Drive Korea’s Strategy
One of the driving factors behind this renewed focus is the emergence of stablecoins tied to the South Korean won. Several local banks and lawmakers are exploring regulatory paths to enable the issuance of won-pegged stablecoins.
This aligns with the country’s recent political shift toward pro-crypto regulation, following the election of President Lee Jae Myung, who ran on a platform supporting stablecoins and crypto ETFs.
The Virtual Asset Committee will be tasked with engaging in policy conversations that balance innovation with security, while providing guidance to the banking sector and facilitating collaboration with government bodies such as the Financial Services Commission and the Financial Supervisory Service.
This development also signals a clear distinction: while CBDCs are managed by the central bank, stablecoins will likely be bank-issued and possibly regulated under a new licensing framework.
Retail CBDC Testing on Hold
Despite the forward momentum, the BOK announced that its retail CBDC pilot program—originally scheduled to end in June—has been postponed.
First introduced in November 2023, the retail CBDC test was meant to explore how the digital won would function in public transactions. However, the project was paused on June 29, due to legal concerns and pushback from banks regarding participation costs.
While the test is currently halted, the Digital Currency Team is expected to revisit it once legal uncertainties are clarified. In the meantime, the bank continues with infrastructure research and technology testing.
BOK Governor Lee Chang-yong emphasized that the nation needs digital currency solutions in the future, whether in the form of a CBDC or regulated stablecoins, to remain competitive in global financial innovation.
Banks Back Won-Pegged Stablecoins
Adding to the digital finance momentum, eight major South Korean banks revealed plans in June to launch a won-pegged stablecoin by late 2025 or early 2026. These banks aim to offer a regulated, blockchain-based alternative to traditional cash and digital payments, enhancing cross-border functionality and interbank transfers.
This has spurred debate between the CBDC model vs. stablecoin issuance by commercial banks. BOK Deputy Governor Ryoo Sang-dai has openly supported the idea of allowing banks to lead stablecoin issuance, suggesting a phased approach that could expand to fintech and payment firms in the future.
South Korea’s financial institutions are keen to participate in the future of programmable money, and with the BOK’s evolving framework, the nation may see both CBDC and stablecoin ecosystems co-exist in the near future.
Conclusion
The Bank of Korea’s Virtual Asset Committee and restructuring of its CBDC units signal a significant policy shift. From pausing retail CBDC trials to encouraging stablecoin innovation, the central bank appears to be striking a balance between control and innovation.
With increasing global scrutiny on digital assets and Korea’s domestic demand for crypto services, the government and central bank are preparing for a digitally inclusive financial future—one where virtual assets, stablecoins, and digital won may all play vital roles.