South Korea has rolled out an ambitious roadmap to turn the Korean won into a more freely convertible currency — coupling foreign-exchange liberalization with a legal framework for won-denominated stablecoins and upgraded digital payment rails.
What was announced
- The plan was jointly unveiled by the Financial Services Commission, the Bank of Korea (BOK), the Financial Supervisory Service and the Korea Securities Depository, according to a July 19 report from Etnews.
- Its twin goals are to remove time and location barriers to trading the won and to modernize cross-border capital flows by integrating digital-asset tools into the financial system.
Stablecoin and digital-asset rules
- The government will create legal rules for issuing and circulating won-backed stablecoins under the upcoming Digital Asset Basic Act. That law is expected to introduce a unified legal framework covering cryptocurrencies and stablecoins and formally recognize won-denominated stablecoins as an issuance category once it takes effect.
- The framework is explicitly intended to enable won-backed stablecoins to operate inside the domestic financial system while facilitating cross-border fund movement.
CBDC, tokenized bonds and payment pilots
- The BOK will enlarge pilot projects that link an institutional central bank digital currency (CBDC) to tokenized government bonds.
- The central bank will also join the Bank for International Settlements’ Project Agora, which develops digital infrastructure for cross-border payments.
- Separately, the BOK is expanding its deposit token program — blockchain-based representations of commercial bank deposits built on the central bank’s wholesale CBDC infrastructure — with prospective use cases including government subsidies, public vouchers, EV charging and everyday payments.
Regulatory stance and industry oversight
- Earlier this month the BOK told lawmakers it wants bank-led consortia to have priority when issuing won-backed stablecoins, arguing that supervision through banks offers stronger safeguards for financial stability and consumer protection. The bank also proposed creating a statutory policy body to coordinate financial regulators and government agencies overseeing the sector.
Foreign-exchange modernization
- The roadmap also addresses FX policy. Following the launch of 24-hour foreign-exchange trading earlier this month, the BOK plans to build an offshore-won settlement network.
- Qualified overseas financial institutions registering as offshore won settlement entities would be able to let foreign users hold, transfer and settle won through offshore accounts without opening Korean bank accounts.
- The government plans to more than double reporting thresholds for foreign-currency lending and capital transactions and, over the long term, shift from a prior-approval regime to a post-reporting framework — reducing administrative friction for cross-border won transactions and aligning policy with the international use of digital assets, including won-backed stablecoins.
Why it matters
- The roadmap signals South Korea’s push to internationalize the won and integrate digital currencies into mainstream finance while trying to preserve financial stability through bank-led issuance and closer regulatory oversight.
- Key things to watch: the passage and final scope of the Digital Asset Basic Act, the BOK’s deposit-token pilots and Project Agora participation, and how strictly bank-preference rules are applied — all will shape how open the won becomes to global crypto and payments markets.
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