Nikolas Sargeant
The Bank of Korea (BOK) has officially launched a new Virtual Asset Division, marking a significant step in the country's evolving approach to cryptocurrency regulation and oversight. South Korea's central bank installed the division to monitor the crypto market and lead internal discussions on local currency stablecoins.
The newly established department will focus on comprehensive market monitoring and regulatory development within the cryptocurrency sector. This division, it said, will be responsible for monitoring the crypto market. Its remit will also include Korean won-pegged stablecoins and legislative matters. The move comes amid growing momentum for local stablecoin development and increased institutional interest in digital assets.
Industry experts view this organizational restructuring as a strategic response to South Korea's rapidly evolving digital asset landscape. The media outlet wrote that experts have interpreted the reshuffle as an "attempt to better respond to recent discussions on stablecoin" initiatives. The division's creation coincides with broader regulatory developments, including plans to allow institutional crypto trading by Q3 2025.
Post-Election Crypto-Friendly Policy Shift
The central bank's move comes amid South Korea's dramatic shift toward cryptocurrency-friendly governance following recent elections. Opposition leader Lee Jae-myung was elected president following his decisive victory in a snap election, marking a significant shift toward cryptocurrency-friendly governance after a campaign centered on comprehensive digital asset reforms. Lee's ambitious cryptocurrency agenda includes authorizing South Korea's massive $884 billion national pension fund to invest in Bitcoin and launching a Korean won-backed stablecoin.
The government has already begun implementing this pro-crypto vision through concrete policy measures. South Korean financial authorities have officially submitted a comprehensive roadmap outlining the approval process for spot cryptocurrency exchange-traded funds (ETFs), with plans to fully prepare ETF rules in the second half of 2025. Additionally, the country is extending startup benefits to the crypto sector, as South Korea's startup ministry has proposed a groundbreaking law revision that would allow cryptocurrency firms to register as "venture companies", granting them access to significant government tax incentives and support programs.
The establishment of this dedicated crypto division represents South Korea's commitment to maintaining regulatory oversight while fostering innovation in the digital asset space. With transactions totaling $42 billion in the first quarter of 2025, according to the Bank of Korea in USD-backed stablecoins alone, the central bank's enhanced focus on cryptocurrency oversight appears both timely and necessary for managing this growing market segment.
