South Korea's Financial Services Commission failed to meet a December 10 deadline to propose regulations for stablecoins, with a new bill expected by January 2026. The central bank wants veto power over stablecoin approvals, but the FSC opposes this, complicating the regulatory landscape amid tensions between government and financial authorities.

South Korea's Financial Supervisory Service will increase its oversight of the cryptocurrency market to combat market manipulation and enforce stricter penalties for IT failures. The initiative follows a significant incident at Bithumb, where a massive transfer error raised concerns about market integrity. The FSS is also preparing for new legislation to regulate digital assets.

In 2025, Japan and South Korea made significant strides in developing local-currency stablecoins, moving away from reliance on U.S. dollar-backed options. Regulatory support and new initiatives signal a shift toward a more diversified stablecoin ecosystem in the region, though skepticism remains about the true adoption of these alternatives.

Hong Joon-pyo, a candidate in South Korea's presidential primary, has vowed to reform regulations on blockchain and cryptocurrencies, aiming to foster the industry akin to the Trump administration's approach in the U.S. He also plans significant investments in AI and other advanced technologies, emphasizing the need for friendlier policies towards crypto.

The Bank of Korea has announced its commitment to actively participate in the development of stablecoin regulations to safeguard monetary and financial stability. This initiative is part of a broader effort to create a regulatory framework addressing the risks associated with stablecoins and their potential impact on monetary policy and traditional financial markets.

South Korea's Financial Services Commission has ordered Apple to remove 14 unregistered crypto apps, including KuCoin and MEXC, from its App Store, effective April 11. This action follows a similar ban on Google’s Play Store as the country intensifies regulatory measures against unregistered foreign crypto services. Violating these regulations can lead to severe penalties for providers.