The Bank of Korea (BOK) is making a landmark move into the cryptocurrency space, announcing plans to integrate deposit tokens with public blockchain networks. This strategic initiative could revolutionize South Korea’s digital currency landscape and challenge the dominance of foreign stablecoins.
This development comes at a crucial time, as major stablecoin players like Tether are expanding their influence through significant investment strategies.
BOK’s Vision for Blockchain Integration
Deputy Governor Lee Jong-ryeol revealed at the Blockchain Leaders Club event that the central bank is actively exploring connections between its deposit tokens and public blockchain networks. These tokens, described as “central bank-backed stablecoins,” would operate on popular networks like Ethereum, potentially transforming how Korean institutions and individuals interact with digital assets.
Addressing Stablecoin Outflow Concerns
Recent data shows stablecoins accounting for 47% of South Korea’s crypto outflows in Q1 2025, totaling approximately 27 trillion won ($19.1 billion). This significant capital movement has raised concerns about:
- Monetary sovereignty risks
- Financial stability concerns
- Potential money laundering vulnerabilities
- The won’s diminishing role in global markets
Global Stablecoin Market Context
The global stablecoin market has reached a remarkable $247 billion, showing a $3.537 billion increase in just one week. This explosive growth underscores the urgency of BOK’s initiative to establish a domestic alternative.
Industry Collaboration and Political Support
Major Korean crypto exchanges including Bithumb, Coinone, and Korbit are actively participating in discussions with regulators. Political support is also growing, with opposition leader Lee Jae-myung advocating for a won-backed stablecoin to address the $40.8 billion crypto outflow challenge.
Implementation Timeline and Next Steps
The BOK’s roadmap includes:
- Security protocol development
- Privacy framework establishment
- Anti-money laundering compliance measures
- Potential business pilot launch by 2026
FAQ Section
What is a deposit token?
A deposit token is a digital representation of commercial bank money on blockchain networks, backed by central bank reserves.
How will this affect existing stablecoins?
The BOK’s initiative could provide a regulated alternative to foreign stablecoins, potentially reducing their dominance in Korean markets.
When will this be available to the public?
The Bank of Korea aims to launch a business pilot by 2026, following successful completion of security and regulatory testing phases.