In a notable move signaling South Korea’s commitment to regulating stablecoins, the Financial Intelligence Unit (FIU) has initiated a comprehensive overhaul of its anti-money laundering (AML) protocols. This shift comes in anticipation of the formal integration of stablecoins into the financial landscape. As South Korea gears up for this transformation, the FIU has announced plans to undertake thorough research into stablecoin operations, courtesy of external contractors. The goal? To compile a detailed report by December that will lay the groundwork for new guidelines for stablecoin issuers and operators.
The South Korean National Assembly Building in Seoul, South Korea. (Source: National Assembly [KOGL Type 1])
As stablecoins gain traction in the global finance arena, South Korea’s regulatory landscape is poised for significant evolution. The FIU is likely to introduce stringent entry barriers and comprehensive business conduct regulations for stablecoin ventures. These will not only focus on enhancing the security of underlying assets but also emphasize adherence to data reporting standards. An FIU official stated that the forthcoming research will be pivotal in shaping AML responses to the dynamic virtual asset ecosystem.
This strategic repositioning underscores the FIU’s intent to ascend as the premier AML regulatory authority overseeing stablecoins, especially in light of President Lee Jae-myung’s controversial plan to dissolve the Financial Services Commission (FSC). While this merger of responsibilities with the finance ministry and Financial Supervisory Service has been debated, recent communications from the government seem to reinforce the FSC’s ongoing role.
President Lee Jae Myung’s approval rating has dropped for the second straight week, sinking to a record low of 51.1 percent, a poll showed Monday. The slide comes amid growing controversy over his Liberation Day pardons. https://t.co/VYWndBDJoZ— The Korea JoongAng Daily (@JoongAngDaily) August 18, 2025
The FIU’s aspirations to carve out an influential regulatory stance come just as several stablecoin initiatives are under consideration at the National Assembly. However, clarity in the legislation regarding stablecoins remains elusive, as lawmakers continue to wrestle with intricate matters, including potential lending services tied to these cryptocurrencies. Critics have voiced concerns, pointing to guidance from the Financial Action Task Force (FATF) indicating that rapid stablecoin adoption could escalate money laundering risks. While many countries, notably the U.S., have swiftly set up countermeasures, South Korea is still lagging, lacking a cohesive regulatory framework and a clear legal definition for stablecoins.
So far, AML legislation such as the Special Financial Transactions Act has primarily targeted exchanges and crypto wallet operators, leaving a gap in the regulations addressing stablecoin issuance and circulation. Yet, amid this regulatory churning, there is a parallel development in the corporate sector.
The headquarters of the South Korean tech giant Naver. (Source: Maskkwon [CC BY-SA 4.0])
As the legislative framework continues to take shape, major players in South Korea’s banking and tech sectors are laying the groundwork for their entry into the stablecoin market. Companies like Kakao and Naver have begun registering trademarks related to stablecoins and, in some cases, have set up dedicated units to spearhead this innovation. Their extensive digital ecosystems, featuring services from e-payments to banking and SaaS, position them well to leverage stablecoin technology once regulations are in place. The anticipation is palpable as these corporations await the legislative green light.
As South Korea navigates its path to stablecoin regulation, the outcomes will conclude whether it can catch up with global counterparts and effectively mitigate the risks associated with digital assets. The coming months will reveal the FIU’s findings and the impact they will have on the country’s evolving crypto landscape. Will South Korea become a leader in stablecoin regulation, or will it continue to play catch-up? Only time will tell.
Stay tuned for updates as South Korea solidifies its stance on stablecoins, and explore more about the evolving crypto regulations around the world. For more details on cryptocurrency regulation, check out [CoinDesk](https://www.coindesk.com), a reputable source for the latest crypto news.