Korea's FSS seeks ex officio seat in Phase II stablecoin policy body

South Korea’s Financial Supervisory Service (FSS) has formally urged inclusion in the stablecoin policy coordination body during the second phase of the country’s virtual-asset legislation. The petition argues that, because stablecoins touch monetary policy and foreign-exchange issues, the supervisor’s enforcement experience must inform policy discussions to keep regulation effective.

According to the industry, current bills under consideration would form a stablecoin policy body centered on the Financial Services Commission (FSC), the Ministry of Economy and Finance (MOF), and the Bank of Korea (BOK). The FSS’s position is that it should be an ex officio member to ensure practical oversight informs the policy framework.

The FSS warns that if oversight work remains siloed from policy discussions, gaps could emerge between design and enforcement, reducing accountability and slowing responses in a crisis. The agency argues that issuer approval, circulation management, and reserve-asset checks are core functions that need direct supervisory input.

Global regulatory practice provides a reference point, the FSS notes. It cites the European Union’s Supervisory College and the United States’ stablecoin oversight bodies, where central banks and supervisors co-manage issuance, distribution, and reserve-assets oversight. The argument is that domestic governance should align with these international standards.

In Korea, stablecoins are increasingly viewed as potential infrastructure for payments, remittances, and even securities settlement, with possible implications for monetary policy and FX markets. This elevates the importance of real-time monitoring and risk management by authorities to avert systemic risks and maintain market integrity.

The push to strengthen oversight comes amid concerns highlighted by Bithumb’s recent large-scale mispayment incident, which underscored internal-control weaknesses in the market. Beyond membership, the FSS has proposed a set of measures: ongoing verification that custody assets match ledgers; codifying internal-control procedures such as multi-signature and strict access controls; mandating IT investment planning and incident-response duties; creating grounds for suspending operations in cases of major violations; and introducing sanctions to deter market-disruptive activities.

The FSS also argues that inspection and sanction powers should be heightened to bank-like levels to ensure swift, consistent enforcement. The debate over who should lead Korea’s stablecoin regime—whether the FSS or the FSC, MOF, and BOK—could become a turning point for how digital-asset oversight is structured and how Korea coordinates with global markets.

For U.S. readers, the issue matters because Korea remains a significant technology and financial hub with active cross-border payments and digital-asset ecosystems. A tighter, more integrated Korean framework could affect foreign-staffed crypto firms, cross-border settlements, and regional policy normalization for digital assets, with potential ripple effects on supply chains, sanctions compliance, and regional tech policy.