Bank-Only Stablecoin Model Criticized for Stifling Innovation in South Korea

South Korean authorities’ policy restricting stablecoin issuance to banks is facing significant criticism. Dr. Sangmin Seo, Chair of Kaia DLT Foundation, argues this approach is illogical and hinders the potential of blockchain technology. The Bank of Korea’s model restricts participation by crypto-native firms and Web3 innovators in a sector vital for fast, low-cost transactions and new financial products. 2025 saw South Korean regulators announce only banks will be allowed to issue stablecoins denominated in the Won. This decision has sparked debate about its impact on innovation.