Tech and Banks: South Korea's Stablecoin Regulations Ignite a Financial Transformation

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Tech and Banks: South Korea's Stablecoin Regulations Ignite a Financial Transformation

Bitget-RWA2025/11/20 01:34

By:Bitget-RWA

- South Korea plans to ease stablecoin issuance rules, allowing non-financial firms to enter the market. - The policy shift aims to boost digital finance but faces bank resistance over market competition and regulatory risks. - Banks seek collaboration on compliance while tech firms push for innovation in AI-driven financial infrastructure. - Critics warn of banking sector instability, but proponents highlight growth potential in global digital currency trends. - Legislative approval is pending, with impli

Regulators in South Korea are set to relax rules surrounding the issuance of stablecoins, a development that could significantly alter the nation’s financial sector and heighten rivalry between established banks and major technology companies. The Financial Services Commission (FSC) is reviewing a plan that would permit non-financial entities, such as leading tech corporations, to create stablecoins

tied to the South Korean won

. This initiative supports President Lee Jae Myung’s campaign pledge to “open up” the stablecoin sector to local businesses, although the proposal is meeting opposition from banks concerned about losing ground to technology competitors

as reported

If implemented, the policy would represent a sharp departure from the 2019 ban on cryptocurrency and stablecoin issuance in South Korea. The government now seeks to establish itself as a frontrunner in digital finance by allowing major tech and fintech players to participate. However, industry experts caution that this could erode banks’ market position,

fueling a new wave of competition centered on technology

instead of conventional banking services.

The FSC’s considerations are part of a larger initiative to modernize the South Korean economy. Recent trade deals with the United States, which involve pledges to invest $350 billion in key American industries, have led South Korean firms to focus more on domestic investments. For example, Samsung Electronics and Hyundai Motor have

revealed substantial investment plans

in areas like semiconductors, AI infrastructure, and other fields. The government has also committed to loosening regulations to foster a more business-friendly environment, a strategy that could soon apply to the stablecoin sector as well.

Tech and Banks: South Korea's Stablecoin Regulations Ignite a Financial Transformation image 0

Banks are proceeding with caution. While they recognize the necessity of adapting to technological progress, representatives emphasize that stablecoin initiatives would probably need to partner with traditional financial institutions for regulatory compliance, asset management, and anti-money laundering protocols

according to industry experts

. “We intend to formulate our own technical and institutional strategies as the government’s plans become clearer,” said a bank representative who declined to be named. This view is widely shared in the sector, with many expecting banks to maintain a role in the stablecoin ecosystem, even if tech companies are granted issuance rights.

The ongoing regulatory discussion also overlaps with South Korea’s efforts to strengthen its AI infrastructure. Princeton Digital Group, a data center company supported by Warburg Pincus, recently

committed $700 million

to its first facility in South Korea to boost AI development. As the need for computing resources grows, stablecoins could enable quicker and more cost-effective transactions for technology-driven sectors, giving the government further reason to open up the market.

Some critics warn that letting non-financial companies issue stablecoins could destabilize the banking industry, especially if tech giants use their extensive user networks to dominate payments and money transfers. Supporters, on the other hand, point to the opportunities for innovation and economic expansion. “

As the global AI era accelerates

, Samsung Electronics expects sustained growth in demand for memory chips in the medium to long term,” the company noted, highlighting the importance of aligning financial innovation with technological progress.

The FSC’s proposal is now pending legislative review, with the National Assembly slated to discuss the measure in the near future. Should the policy be approved, South Korea could become a leader in the worldwide shift toward digital currencies, while also challenging the adaptability of its traditional banking sector amid rapid innovation.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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