South Korea central bank warns stablecoins may raise foreign exchange risks

Speaking at the Asian Financial Forum in Hong Kong, Lee said authorities are considering a new registration framework that would allow domestic institutions to issue virtual assets, according to a report by Radio Television Hong Kong. He cautioned that stablecoins remain controversial because of their potential impact on foreign exchange stability.

Lee said won-pegged stablecoins would likely be used mainly for cross-border transactions. He warned that won stablecoins, combined with U.S. dollar stablecoins, could be used to bypass capital flow management measures during periods of volatility.

The comments come as debate over stablecoin rules slows progress on South Korea’s proposed Digital Asset Basic Act. Chosun Ilbo reported that submission of the bill to the National Assembly has been postponed as disagreements persist over stablecoin issuance rules, ownership caps for exchanges and regulatory oversight. The central bank has argued that issuance should be led primarily by banks to limit systemic and foreign exchange risks, while industry groups have pushed for a broader authorization system that would allow non bank companies to participate under supervision. Financial authorities have explored a compromise involving bank led groups, but progress has stalled.

The legislative deadlock has also delayed discussions on related initiatives, including allowing listed companies to trade crypto and introducing spot crypto exchange traded funds in South Korea. Lee’s warnings were issued as the won faces renewed pressure, with Reuters reporting that authorities are grappling with potential large scale dollar outflows amid trade tensions with the United States and a weakening currency.

As GNcrypto wrote on 27 January 2026, the Australian Securities and Investments Commission warned that rapid innovation in digital assets, payments and artificial intelligence is widening regulatory gaps and increasing consumer risks, including exposure to unlicensed crypto firms. ASIC said it will focus in 2026 on monitoring business models that test regulatory boundaries and on keeping licensing expectations clear.