Bank of Korea to Launch Crypto Oversight Committee
Key Takeaways
Dedicated Oversight Team Formed: The Bank of Korea has established a Virtual Asset Committee to monitor cryptocurrency markets, analyse risks, and coordinate with other institutions as crypto regulation advances.
Focus on Stablecoins and Legislation: The committee will play a key role in responding to discussions around stablecoins and virtual assets, while supporting the government during the ongoing legislative process.
Digital Currency Seen as Inevitable: Governor Lee Chang-yong emphasised that South Korea will need a digital currency in the future, signalling the central bank’s long-term commitment to digital finance innovation.
South Korea’s central bank, the Bank of Korea (BOK), has established a dedicated Virtual Asset Committee to oversee cryptocurrency activity and support the evolving policy framework for stablecoins and digital assets.
Overview
On July 29 2025, Yonhap News announced that a Bank of Korea official stated that the newly formed Virtual Asset Team will be tasked with addressing “discussions concerning stablecoins and virtual assets and engaging in collaborative efforts with the government throughout the legislative process.”
Formed within its Financial Payments Bureau, the unit reflects a strategic shift toward proactive engagement with a fast-growing crypto sector.
Strategic Rationale and Institutional Restructuring
The new committee—sometimes called the Virtual Asset Team or Virtual Asset Division—will function under the Financial Payments Bureau and focus on monitoring crypto-market developments, assessing associated risks, and engaging actively in legislative processes around won‑based stablecoins. Government coordination and oversight of policy discussions, particularly with the National Assembly, are core functions.
This move marks a significant institutional upgrade. The existing Digital Currency Research Team has been renamed the Digital Currency, signalling a shift from theoretical analysis to applied operational work. In addition, two new sub-units have been created: the Digital Currency Technology Team, which focuses on R&D, and the Digital Currency Infrastructure Team, responsible for building platforms—such as deposit‑token-based digital voucher systems—and conducting testing.
CBDC (central bank digital currency) pilot testing, initially scheduled for April–June 2025, has been postponed due to legal uncertainties and concerns over financial institutions’ participation costs. The Bank of Korea has emphasised the potential resumption once regulatory clarity is achieved.
Legislative Context & Stablecoin Policy Debate
Establishing the virtual asset committee comes amid intense legislative debate over stablecoin regulation. Proposals are underway to authorise the issuance of won‑pegged stablecoins by entities meeting specific capital requirements, pitting commercial banks, pro-stablecoin lawmakers, and BOK officials in conflict over the proper regulatory boundary.
Deputy Governor Ryoo Sang‑dai has advocated a cautious, phased rollout: only tightly regulated commercial banks should issue stablecoins initially, with expansion to other issuers later. He warned that rapid or uncontrolled issuance could disrupt monetary policy or the payments system. The ruling Democratic Party, led by President Lee Jae Myung, meanwhile, is pushing forward legislation to legalise stablecoin issuance and digital asset ETFs.
Banks have responded by announcing plans to launch won‑pegged stablecoins by late 2025 or early 2026. A BOK official reportedly emphasised that this initiative was a key driver behind forming the virtual asset unit—ensuring the bank remains engaged in shaping policy for these evolving instruments.
Implications for Market Oversight and Financial Stability
With over 30% of South Korea’s population investing in digital assets—retail holdings amounting to more than $70 billion—the crypto market’s scale presents real systemic implications. Authorities focus on capital outflows facilitated by dollar‑backed stablecoins, valued at over $19 billion, that moved out in the first quarter of 2025 alone.
The new virtual asset committee will bridge regulatory efforts among the Bank of Korea, Financial Services Commission, and other bodies. It is expected to contribute to closing legislative gaps—such as amendments to the Foreign Exchange Transactions Act—to address better illicit flows involving virtual assets.
In the global context, the BOK’s move follows trends like the US GENIUS Act, which formalised stablecoin regulation in 2025. Still, South Korea faces unique challenges: the won is not a global reserve currency, and its limited convertibility raises risks around won‑pegged stablecoins, impacting foreign exchange stability.
Launching this Virtual Asset Committee, the Bank of Korea is signalling a decisive shift—moving from theoretical research toward active regulation and policy leadership in a rapidly evolving digital asset landscape. With stablecoin legislation underway, CBDC testing paused, and domestic banks rushing to issue won‑based tokens, the timing reflects urgency and opportunity. As the committee engages with policymakers, financial institutions, and global peers, its decisions could significantly shape South Korea’s digital financial future.