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.

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.

South Korea, under President Lee Jae Myung, is prioritizing the development of Korean won-based stablecoins to enhance monetary independence and reduce capital outflows. While proponents highlight potential benefits for local industries, critics warn that the won's lack of global acceptance could limit the initiative's success and even exacerbate capital flight risks.

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 major banks, including Shinhan, Hana, KB Financial, and Woori Bank, are set to meet with Tether and Circle to discuss potential partnerships in stablecoin distribution and the issuance of a won-pegged stablecoin. These meetings are part of President Lee Jae Myung's initiative to establish a stablecoin market in the country following his election campaign promises.