South Korea's central bank pledges to actively participate in the development of stablecoin legislation

According to Mars Finance, the Bank of Korea (BOK) recently stated that it will "actively participate" in the legislative process for stablecoin regulation to prevent potential threats to monetary policy and financial stability. The central bank noted in a payment system report that stablecoins, as payment tools, have inherent characteristics that could weaken monetary policy effectiveness and transmit crypto market risks to the traditional financial system if their usage expands. South Korea is advancing its crypto legislation's second phase, which will focus on stablecoin regulation, crypto service provider classification, and token transparency requirements. This legislative phase is expected to begin drafting in the second half of this year, supplementing the first round of crypto regulations that took effect in July 2024. The central bank also revealed that as of December 2024, South Korea has approximately 18.25 million crypto investors, representing over 35% of the total population. The top five local exchanges have an average daily trading volume of $1.21 billion. Additionally, the Bank of Korea is testing a central bank digital currency (CBDC), planning to conduct the second phase of trials in October to explore the feasibility of user-to-user transfers.