The Bank of Korea allows overseas crypto asset investments, and the issuance pathways for Korean won stablecoins and local tokens emerge

January 27 News, South Korea has taken a key step in digital asset regulation. Rhee Chang-yong, Governor of the Bank of Korea, confirmed at the Asian Financial Forum in Hong Kong that authorities have allowed Korean residents to invest in overseas-issued crypto assets, marking an important turning point as Korea’s crypto policy shifts from a highly closed approach to a limited open one.

This change is not simply a relaxation of controls. Regulators are studying a new registration system that may, in the future, allow local Korean financial institutions to issue virtual assets within a compliant framework. The plan will introduce licensing and ongoing supervision, aiming to steer market demand onto a controllable track rather than letting it flow into gray or offshore areas.

Rhee Chang-yong stated that this move is a balanced decision made in response to strong market demand, allowing investors to access global digital assets while still maintaining regulatory control over local issuance to prevent disorderly expansion from impacting the financial system.

Regarding the structure of digital currencies, the Bank of Korea has also provided a clear positioning. Stablecoins denominated in Korean won are seen as more suitable for cross-border settlements, helping businesses reduce international transfer costs and improve speed; meanwhile, tokenized bank deposits are more likely to become mainstream tools in domestic retail payment scenarios. Since Korea’s existing payment system is already highly mature, the advantages of retail central bank digital currencies (CBDC) in daily consumption are not obvious, so the central bank prefers to promote pilots of wholesale CBDC and tokenized deposits.

However, stablecoins remain the most cautious variable for regulators. Rhee Chang-yong warned that if the Korean won stablecoin becomes linked with the US dollar stablecoin, capital could quickly shift to dollar assets during exchange rate fluctuations or market panic, potentially triggering capital outflows. He also expressed concerns about non-bank institutions issuing stablecoins, believing this could amplify systemic risks and weaken regulatory effectiveness.

Korea’s current strategy is to gradually open up overseas crypto asset investments while firmly controlling the development path of local issuance and stablecoins. This approach aims to remain competitive in the wave of digital finance while safeguarding the bottom line of currency and capital flows.