South Korea is rethinking how far it should open the door to digital assets while keeping control of capital flows.
At the same time, regulators are considering a new registration regime that would allow domestic institutions to issue virtual assets. The idea is to bring more activity onshore, where it can be supervised, rather than pushing investors toward offshore products that sit outside local oversight.
Allowing domestic institutions to issue virtual assets would be a major change for South Korea. Today, much of the crypto exposure for Korean investors comes through foreign tokens and platforms. A registration system could give banks and licensed firms a legal path to issue and manage digital assets under clear rules.
This approach mirrors a broader global trend. Jurisdictions like Hong Kong and Singapore have moved toward licensing frameworks to attract regulated crypto businesses. According to the Bank for International Settlements, countries that adopt clear crypto rules tend to see more institutional participation and better reporting standards.
A real world example helps explain the logic. If a Korean asset manager could issue a regulated token locally, investors might prefer it over an offshore alternative with limited transparency. That could reduce risk while keeping innovation alive inside the country.
Governor Rhee also delivered a clear warning about stablecoins, especially those pegged to the Korean won. A stablecoin is a digital token designed to track the value of a traditional currency. While they promise stability, Rhee said a KRW denominated stablecoin could be used to bypass capital flow management rules.
He pointed to another risk. Sharp exchange rate swings could push investors to rapidly move funds into US dollar stablecoins, triggering large cross border transfers. In times of stress, this kind of digital flight could happen much faster than through traditional banks.
Non bank issuance adds another layer of complexity. If stablecoins are issued by tech firms rather than banks, regulators may struggle to monitor liquidity, reserves, and cross border movement. The collapse of algorithmic stablecoins in past market cycles shows how quickly confidence can vanish when oversight is weak.
The information provided by Altcoin Buzz is not financial advice. It is intended solely for educational, entertainment, and informational purposes. Any opinions or strategies shared are those of the writer/reviewers, and their risk tolerance may differ from yours. We are not liable for any losses you may incur from investments related to the information given. Bitcoin and other cryptocurrencies are high-risk assets; therefore, conduct thorough due diligence. Copyright Altcoin Buzz Pte Ltd.
Circle's Digital Asset-Backed Borrowing lets institutions post cirBTC on Morpho to borrow USDC, with rates set by the lending market.
BTCUSDC+1 more
North Korea's WaterPlum stole at least $10.7M posing as crypto recruiters, infecting 30,000+ devices in 100+ countries, a four-country advisory said.
Solana's SOL token reached $117.23 on Sept. 21, its highest level since January, as Bitcoin pushed above $86,000 and roughly $900M in leveraged crypto shorts
SOLRTHK reported that Bank of Korea Governor Rhee Chang-yong, speaking at the Asian Financial Forum in Hong Kong, noted South Korea has allowed residents to invest in overseas-issued virtual assets amid market pressure, while regulators are considering a new registration regime that Show more
🚨NEW: 🇰🇷South Korea’s financial giant KB Kookmin Card filed a patent for stablecoin credit card. The design allows stablecoins held in a digital wallet to be spent directly through existing credit cards. Show more
