South Korea has unveiled a roadmap to make the Korean won a freely convertible currency, pairing foreign exchange reforms with a legal framework for won-backed stablecoins and new digital payment infrastructure.
Summary
- South Korea has unveiled a roadmap supporting won backed stablecoins alongside foreign exchange reforms.
- The plan includes legal rules for stablecoins, CBDC pilots, and tokenized government bond projects.
- Authorities also plan to ease cross border capital rules and expand offshore won settlement infrastructure.
According to a July 19 report from local mediahouse Etnews, the roadmap was jointly announced by the Financial Services Commission, the Bank of Korea, the Financial Supervisory Service, and the Korea Securities Depository. The plan seeks to remove time and location barriers to trading the Korean won while improving the country’s cross-border capital flow system.
As part of the proposal, the government plans to establish legal rules for issuing and circulating won-denominated stablecoins under the upcoming Digital Asset Basic Act. The report said the legislation would provide the legal basis for bringing won-backed stablecoins into the domestic financial system while also supporting cross-border movement of funds.
The Digital Asset Basic Act is expected to introduce a unified legal framework covering cryptocurrencies and stablecoins. Under the proposal, won-backed stablecoins would become an officially recognized issuance category once the law takes effect.
Stablecoins, CBDCs and tokenized bonds move forward
Alongside the stablecoin framework, the Bank of Korea plans to expand pilot projects linking an institutional central bank digital currency (CBDC) with tokenized government bonds. The central bank will also participate in the Bank for International Settlements’ Project Agora, which is developing digital infrastructure for cross-border payments.
The latest roadmap builds on earlier positions taken by the Bank of Korea. Earlier this month, the central bank told lawmakers that bank-led consortiums should receive priority when issuing won-backed stablecoins, arguing that existing banking supervision offers stronger safeguards for financial stability and consumer protection. It also proposed creating a statutory policy body bringing together financial regulators and other government agencies to oversee the sector.
At the same time, the Bank of Korea continues expanding its deposit token program, which operates separately from stablecoins. Deposit tokens are blockchain-based representations of commercial bank deposits issued on top of the central bank’s wholesale CBDC infrastructure. The central bank has said future use cases will include government subsidies, public vouchers, electric vehicle charging payments, and other everyday payment services.
Foreign exchange rules to be eased
Beyond digital assets, the roadmap includes measures to modernize South Korea’s foreign exchange system. Following the launch of 24-hour foreign exchange trading earlier this month, the government plans to establish an offshore won settlement network within the Bank of Korea.
According to Etnews, overseas financial institutions that register as offshore won settlement entities would allow foreign users to hold, transfer, and settle won through offshore accounts without opening bank accounts in South Korea.
The government also plans to more than double reporting thresholds for foreign currency lending and capital transactions. Over the long term, authorities intend to replace the current system centered on prior approvals with a post-reporting framework, reducing administrative requirements for cross-border won transactions while aligning the financial system with the international use of digital assets, including won-backed stablecoins.
