South Korea shifts digital asset oversight and expands CBDC testing

The Financial Services Commission takes stablecoin control

The Democratic Party of Korea clearly eases entry for new players with the Basic Digital Asset Act, which allows non-banks and payment providers to issue stablecoins. This legislation shifts stablecoin oversight from the Bank of Korea to the Financial Services Commission. Issuers must meet a capital requirement of won 500 million, which is a drop from the earlier won 5 billion proposal. The Financial Services Commission and the Fair Trade Commission are reviewing the model that ties each exchange to a single banking partner to fix market concentration. Because this review follows a government study that found the exchange-bank pairing model reinforces market concentration, it aims to limit the advantages of dominant players. Representative Min Byeong-deok said the intention is to ease entry barriers while establishing measures to protect investors. The Bank of Korea also works with Samsung on research into offline CBDC technology.

Project Hangang expands to 500,000 users

The Bank of Korea expanded Project Hangang to its second phase in September 2026. This phase involves nine banks and supports up to 500,000 users. Kakao Bank, Kakao Pay, and GroundX form the core team providing integration for the pilot. The pilot tests biometric fingerprint approvals, person-to-person wallet transfers, and automatic top-ups when balances run low. It also tests programmable tokens for government subsidies, which allows users to use funds only for permitted purposes or vendors.

The Bank of Korea Governor Shin Hyun-song made Project Hangang a centerpiece of his policy address after he took office in April 2026 to push for a system where commercial banks create deposit tokens. Phase 1 included seven banks and 12,000 merchants that produced 114,880 transactions between April and June 2025. Banks spent between 30 billion and 35 billion won to build the infrastructure for those results. BOK officials previously noted that offering anonymity reduces transaction efficiency, so they chose to improve compliance at the sacrifice of privacy. The participants include Kookmin, Shinhan, Hana, Woori, Nonghyup, Industrial Bank of Korea, Busan Bank, Gyeongnam Bank, and iM Bank. You should watch how these programmable tokens influence the speed of government subsidy disbursements. Will the integration of interest payments into deposit tokens change how commercial banks view wholesale CBDC in the future?

Corporate trading and exchange listing hurdles

South Korea lifted its nine-year ban on corporate crypto trading in February 2026. Roughly 3,500 listed companies can now invest in digital assets, though they must cap investments at 5% of equity and stick to the top 20 tokens. The Ministry of Economy and Finance also announced plans to update the national asset law to classify digital cryptocurrencies as official national assets.

New VASP registration criteria took effect on August 20, 2026, requiring a debt ratio of 200% or below and no history as an insolvent financial institution. Registration also requires major-shareholder suitability, social credibility, and no default in the past three years. The KRW 1 million Travel Rule threshold is removed, and information sharing will apply to all transfers starting in February 2027.

Bithumb targets an IPO in 2028 and plans to file for a preliminary listing review in 2027. The company is currently transitioning from Korean Generally Accepted Accounting Principles to Korean International Financial Reporting Standards. Bithumb also separated its exchange business from Bithumb Asset to simplify its structure. The firm is overhauling risk management to match the strict standards of regulated financial institutions. Bithumb also works with domestic and international securities firms to strengthen compliance monitoring. Bithumb works with a major accounting firm and law firms to meet the requirements of global public companies.