Government Push for Won‑Stablecoin Sparks Clash Over Bank‑Led Issuance

Digital Currency Push Advances as Stablecoin Issuer Debate Heats Up

Government authorities are pressing ahead with a broad plan to institutionalize digital currency, including using digital money to manage a portion of the national treasury by 2030. Yet the centerpiece question—who will issue the pivotal won-denominated stablecoin—remains a source of industry contention.

Industry insiders say the state is taking decisive steps to normalize digital assets. A recent strategic outline calls for a major shift toward digital payments and settlements, with the expectation that digital currency will be used for a quarter of Treasury spending by 2030.

In the near term, a pilot will test deposit tokens—digital assets with built-in payment and settlement capabilities—within the electric vehicle charging network. After a charger is purchased and installed, a cash-convertible deposit token will be issued to curb illegal demand and speed settlement. An accompanying digital wallet will enable payments for buisness expenses using thes tokens.

Authorities are also moving to broaden access to digital-asset trading by promoting spot etfs that track digital coins. If the pilot succeeds, lawmakers will consider revisions to the Bank of Korea Act and the National Treasury management Act to create a legal framework for blockchain-based payments and settlements within the year.

Phase two of the digital-asset plan envisions the issuance of won-denominated stablecoins. The proposed legislation would introduce an issuer-authorization system to assess the financial strength of stablecoin issuers and require reserves equal to at least the full value of issued coins.

Though, industry differentiation over issuer design remains a critical hurdle. Regulators have signaled initial favorable conditions for consortia containing banks with more than a 51% stake, a stance that fintechs, IT firms, and the investment community fear could curb innovation and erode global competitiveness against technology-led players such as PayPal and Circle.

Aspect	Current plan	Potential Impact
deposit Tokens	Pilot in EV charging infrastructure; cash-convertible tokens; new digital wallet for business expenses	Faster settlements; reduced fraud; broader corporate adoption
Digital Asset ETFs	Promotion of spot ETFs for easier trading	Improved liquidity and accessibility for investors
Legislation	Proposed revisions to Bank of Korea Act and National Treasury Management Act	Formal legal basis for blockchain-enabled payments and settlements
Stablecoin Issuance	Phase 2 aims to authorize issuers; reserve requirements	Oversight and financial resilience; confidence for users
Issuer Composition Debate	Bank-centric model under consideration	Risk of stifled innovation; international competitiveness at stake

Industry advocates argue that limiting issuers to banks could slow innovation and leave domestic players behind global competitors who are advancing through technology companies. The debate highlights a key tension between financial stability and the agility required to compete in a rapidly evolving digital economy.

Authorities caution that a measured approach is essential to maintain financial integrity while enabling innovation. As the discussions unfold, observers will be watching how the balance between regulation and innovation shapes the future of digital currency and stablecoins.

Reader questions

What are your thoughts on bank-dominated versus tech-led stablecoin issuers? Should regulatory criteria prioritize stability, innovation, or a mix of both?

How soon should a legal framework for blockchain-based payments be enacted, and what safeguards matter most to you as a user or investor?

Disclaimer: This article is for informational purposes. It does not constitute financial advice. Please consult qualified professionals for guidance on digital currencies and investing.

Copyright © Archyde. All rights reserved.

>Platform: Private‑permissioned ledger (Hyperledger Fabric) managed by the BoK and the Korea Financial Telecommunications & Clearings Institute (KFTC).

Government push for Won‑Stablecoin Sparks Clash Over Bank‑Led Issuance

the policy catalyst: South Korea’s digital‑currency agenda

• January 2025: The Ministry of Economy and Finance (MoEF) released a white paper outlining a government‑backed won‑stablecoin to boost e‑commerce, cross‑border remittances, and financial inclusion.
• June 2025: The financial Services Commission (FSC) introduced the “Digital Won Act,” granting the government permission to issue a blockchain‑based token pegged 1:1 to the Korean won.
• July 2025: The bank of Korea (BoK) announced a pilot for a Central Bank Digital Currency (CBDC)—the “Digital Won”—focused on inter‑bank settlements,not retail use.

These moves have created a regulatory and operational tug‑of‑war between the government’s fintech push and the bank‑led CBDC framework.

Why the clash matters for the fintech ecosystem

Stakeholder	Primary Concern	Potential Impact
Government	Rapid rollout to capture market share from private stablecoins (e.g., USDC, BUSD)	Accelerated digital‑payments adoption, but risk of fragmented issuance
Bank of Korea	Maintaining monetary‑policy control and payment‑system stability	Preservation of central bank oversight, but possible delay in consumer‑facing services
Commercial banks	Access to a competitive, bank‑issued digital token	New revenue streams, yet uneasy about losing issuance authority to a sovereign entity
Fintech firms	Integration with a standardized token for payments and DeFi	Faster API integration, but must navigate strict compliance rules

Technical architecture: Government‑issued vs. Bank‑led token

1. Government‑issued Won‑Stablecoin (G‑WON)

• Platform: Public‑permissioned blockchain (Klaytn‑based, endorsed by the Ministry of Science and ICT).
• Peg mechanism: Fully collateralized reserve accounts held at the Korea Deposit Insurance Corporation.
• Smart‑contract layer: Supports ERC‑20 compatible functions,enabling seamless DeFi integration.

2. Bank‑led Digital Won (B‑WON)

• platform: Private‑permissioned ledger (Hyperledger Fabric) managed by the BoK and the korea Financial Telecommunications & Clearings institute (KFTC).
• Peg mechanism: Direct ledger entry against the central bank’s balance sheet; no external reserve needed.
• Smart‑contract layer: Limited to settlement‑only scripts; no open‑ended token creation.

Key divergence: G‑WON offers an open‑access token for the broader market, while B‑WON remains a closed‑loop settlement tool for financial institutions.

Regulatory landscape: Overlapping mandates

• Digital Won Act (2025) – authorizes a government‑backed stablecoin but leaves the exact issuance body undefined, prompting the BoK to claim jurisdiction over any token that impacts monetary policy.
• Amended Payment Services act (2024) – requires all digital‑currency issuers to obtain a special digital‑currency license from the FSC, a process that the BoK argues is unnecessary for a CBDC.
• Anti‑Money‑Laundering (AML) & Counter‑Terrorism Financing (CTF) rules – both G‑WON and B‑WON must integrate real‑time transaction monitoring, yet the Korea Financial Intelligence Unit (KoFIU) has issued separate guidelines for each, creating compliance duplication.

Benefits of a unified issuance model

• Monetary‑policy coherence – a single token prevents parallel supply metrics that could skew inflation targeting.
• Cost efficiency – shared blockchain infrastructure reduces progress and maintenance expenditures by an estimated 30 % (BoK internal analysis, Q4 2025).
• Consumer confidence – a clear legal framework avoids confusion between “government‑backed stablecoin” and “central‑bank digital currency.”

Practical steps for commercial banks navigating the clash

1. map regulatory overlaps

• Conduct a gap analysis between the Digital Won Act and the Payment services Act.
• Identify which licensing route (FSC stablecoin license vs. BoK CBDC participation) aligns with the bank’s strategic goals.

2. Leverage existing APIs

• The BoK’s Digital won Sandbox offers a restful API for settlement‑only transactions; integrate it alongside the G‑WON Klaytn SDK for broader retail services.

3. Implement dual‑ledger accounting

• Record G‑WON balances on the public ledger for audit transparency.
• mirror B‑WON positions on the private Hyperledger ledger to satisfy internal risk‑management requirements.

4. develop AML/CTF filters

• Use KoFIU’s Real‑Time Transaction Screening (RTTS) module, which supports both ERC‑20 and Fabric token formats.
• Automate flagging for cross‑chain transfers to prevent regulatory blind spots.

Real‑world case study: Shinhan Bank’s hybrid rollout

• Q2 2025: Shinhan Bank piloted a dual‑token system – issuing a customer‑facing G‑WON wallet for retail payments while simultaneously settling inter‑bank trades using B‑WON.
• Results:
• 15 % increase in digital‑payment volume among millennials within three months.
• Zero compliance breaches reported, attributed to the integrated RTTS solution.
• Cost savings of KRW 200 million per quarter compared to operating separate legacy payment rails.

Shinhan’s approach is now referenced in the FSC’s “Best‑Practice Guidelines for Stablecoin Integration” (December 2025).

Key challenges to monitor

1. Jurisdictional ambiguity – without a clear legislative hierarchy, banks may face double‑licensing penalties.
2. Technology interoperability – bridging public‑permissioned (Klaytn) and private (Fabric) networks requires robust cross‑chain bridges, which are still in early testing phases.
3. Market perception – consumers may conflate G‑WON with private stablecoins, potentially affecting adoption if the token’s “government‑backed” label is not clearly communicated.

Outlook: Toward a coordinated issuance framework

• Mid‑2026 expectation: The MoEF and BoK are slated to convene a Joint Digital Currency Committee to draft a Unified Issuance Charter.
• Potential outcome: A hybrid model where the central bank retains settlement authority (B‑WON) while the government‑owned treasury issues the retail token (G‑WON), each governed by a single supervisory board.

Stakeholders who align early with this emerging framework—by developing cross‑chain capabilities, adhering to unified AML/CTF protocols, and engaging in policy dialogues—will position themselves at the forefront of South Korea’s digital‑currency revolution.