South Korea has laid out a detailed roadmap to make the won freely convertible — pairing foreign-exchange liberalization with a legal and technical framework for won-backed stablecoins and upgraded digital payment rails.
What’s new
- The Financial Services Commission, Bank of Korea (BOK), Financial Supervisory Service and Korea Securities Depository jointly announced the plan, according to an Etnews report on July 19.
- The roadmap aims to remove time-and-location limits on trading the won and to streamline cross‑border capital flows.
- A core element is legislation under the upcoming Digital Asset Basic Act that would create a unified legal framework for cryptocurrencies and stablecoins and explicitly authorize won-denominated stablecoins as an issuance category.
- The BOK will expand pilots linking a wholesale central bank digital currency (CBDC) to tokenized government bonds and join the Bank for International Settlements’ Project Agora to develop cross‑border digital payment infrastructure.
Stablecoins, banks and oversight
- The Digital Asset Basic Act is expected to provide the legal basis for issuing and circulating won-backed stablecoins in South Korea and help enable cross‑border movement of won via tokenized instruments.
- The BOK has signaled that bank-led consortiums should be prioritized to issue won stablecoins, arguing existing banking supervision offers stronger protections for stability and consumers.
- Regulators are also proposing a statutory policy body to coordinate oversight across agencies.
CBDC, deposit tokens and real-world use cases
- The central bank continues to grow its deposit token program (distinct from stablecoins). Deposit tokens are blockchain representations of commercial-bank deposits issued over the BOK’s wholesale CBDC rails.
- The BOK has flagged practical use cases for deposit tokens including government subsidies, public vouchers, EV charging payments and other everyday services.
Foreign exchange reforms to support cross-border use
- After launching 24-hour foreign-exchange trading earlier this month, authorities will establish an offshore won settlement network managed through the BOK.
- Overseas financial institutions that register as offshore won settlement entities would let foreign users hold, transfer and settle won through offshore accounts without opening South Korean bank accounts.
- The government plans to more than double reporting thresholds for foreign-currency lending and capital transactions, and intends — over the longer term — to shift from a prior-approval regime to a post-reporting framework. This would reduce administrative frictions for cross‑border won flows and better align rules with the international use of digital assets, including won-backed stablecoins.
Why it matters
If implemented, the road map could accelerate adoption of won-pegged digital instruments, expand practical CBDC-based services, and make the won more accessible for international investors and businesses. It also signals a regulatory preference for bank involvement and a coordinated supervisory approach as South Korea integrates tokenized money and payments into its financial system.
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