The Bank of Korea has proposed that issuers of won-based stablecoins must deposit reserve assets directly at the central bank. The proposal appeared in documents the bank submitted to the National Assembly’s finance committee on October 1.
The government plans to publish its first draft bill on won-pegged stablecoins in October. Policymakers argue that tighter controls will protect users and stop private issuers from exploiting seigniorage-like profits.
Bank of Korea Pushes for Stricter Controls
According to the South Korean economic daily Herald Economy report and the submission, the BOK said that “if deemed necessary by the central bank, mandatory deposit requirements of reserve assets at the central bank should be considered.” The bank emphasized that such a measure could reduce risks linked to sudden redemption surges and uncontrolled money supply growth outside its oversight.
The BOK explained that issuers profit by investing reserves in risk-free assets such as government bonds. Redirecting these reserves into central bank deposits would cap issuers’ earnings at policy rate levels.
Citing global precedents, the BOK highlighted the US Federal Reserve, which pays policy-rate interest on deposits but does not impose mandatory requirements. In the US, only Fed-approved entities may issue stablecoins.
The BOK added that requiring deposits within the central bank could align stablecoins more closely with the traditional payment system and ensure redemption certainty. Officials said this step would build user confidence and reduce systemic risks if stablecoins expand to a significant share of transactions.
Full Reserve Demands and October Bill
The measure could reduce the profitability of stablecoin issuance in Korea and discourage non-bank players. Yet the BOK argued that the tradeoff provides greater stability, including stronger safeguards against a “coin run” or mass redemptions.
The central bank also backed a full reserve model, stating that issuers should deposit 100% of their liabilities in safe assets, similar to rules for prepaid payment instruments. It suggested creating a policy council to define eligible reserves, while allowing the government to refine rules through presidential decrees.
On issuance, the BOK said, “Because of risks such as regulatory arbitrage and possible restructuring of the financial industry, initial issuance should come from consortia led by banks with strong compliance capacity, before expanding more broadly.”
The Financial Services Commission plans to release its official legislative draft in October. That move will show how Korea positions itself in the global race to regulate stablecoins.
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