As South Korea's stablecoin regulation breaks the ice, Circle and Tether send different signals

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Author: Zen, PANews The South Korean stablecoin market is entering a critical "ice-breaking moment." Over the past two weeks, from the open signals released by senior central bank officials to the substantive progress in the legislative process, coupled with intensive high-level contacts from the two giants Circle and Tether, various signs indicate that South Korea's regulatory framework for stablecoins has moved beyond principled discussions and officially entered the deep water of institutional design and interest-based competition. For global issuers, South Korea is no longer a distant market to be watched with caution, but an outpost in the battle for seats in the future digital financial system interface, becoming an important market that requires early positioning. From Prohibition to Regulation: Stablecoin Institutional Design Enters a Critical Stage Recently, the shift in the top-level policy wind has become clearer. On April 14, Shin Hyun-song, a nominee for Governor of the Bank of Korea, stated that KRW stablecoins will play a role in the monetary ecosystem in the future, and noted that they can form a relationship that is both complementary and competitive with CBDC and deposit tokens. This statement is more open than before and has been interpreted by the market as a clear signal of a change in the policy atmosphere. Earlier, senior officials at the Bank of Korea had proposed that KRW stablecoins should adopt a gradual introduction path, prioritizing issuance by strictly regulated commercial banks, and then gradually expanding to non-bank institutions based on experience. This means that South Korea's regulatory thinking is not a full opening, but emphasizes inclusion in the banking system first, before discussing broader market-oriented expansion. Running parallel to this is the deposit token experiment under the code name "Project Hangang." The Bank of Korea has advanced the pilot to the second phase, with the number of participating banks expanded to nine, and plans to extend the application of deposit tokens to more real-world payment scenarios. The public sector has also begun testing its use for subsidies and fiscal expenditures, showing that South Korea is exploring an institutionalized path for bank-based digital currencies. Therefore, the focus of current discussions in South Korea is no longer simply "whether to allow stablecoins," but how to establish a tiered structure between KRW stablecoins, deposit tokens, and USD stablecoins. Who can issue them, how foreign institutions can enter, and what role local financial groups play have become the core of the next stage of institutional competition. What is currently taking shape in South Korea is not a single path, but a three-line parallel system is emerging: deposit tokens led by banks as the core, regulated KRW stablecoins as a supplement, and conditional access for foreign USD stablecoins as an extension. Who is qualified to issue, how foreign institutions can achieve compliant landing, and what role local financial groups play have become the core issues of the next stage of institutional competition. Circle and Tether Accelerate Positioning: Two Different Paths to Entering South Korea During this window, Circle's layout is the clearest and most consistent with South Korea's current regulatory preferences. On April 13, Circle co-founder and CEO Jeremy Allaire clearly stated at an event in Seoul that Circle does not intend to issue KRW stablecoins itself. In his view, a more likely model is for a consortium of local South Korean banks, fintech companies, and digital asset firms to lead the issuance of KRW coins, while Circle provides mature stablecoin operational technology, platform capabilities, and cross-chain infrastructure support. In addition, Allaire also publicly stated that if South Korea's future "Digital Asset Basic Act" provides a compliant access path for overseas stablecoin issuers, Circle is willing to apply for a license in South Korea and establish a local legal entity. This statement not only responds to South Korea's regulatory reality but also shows that Circle intends to enter the market as a technology and platform provider. Circle is promoting a four-in-one strategy in South Korea, actively communicating with regulators, negotiating cooperation with banks, and exploring the possibilities of exchange landing and payment pilots. Public information shows that Circle has discussed cross-border remittances, settlement, and RWA technical support with financial institutions such as KB, Shinhan, and Hana, and is promoting cooperation with platforms such as Dunamu and Bithumb. More notably, Circle is also evaluating the future entry framework for overseas stablecoin issuers under South Korea's "Digital Asset Basic Act." Its public stance is not short-term marketing, but a longer-term entry plan built around licenses, local entities, and technological cooperation. Rather than saying Circle is "selling a coin" in South Korea, it is trying to occupy the infrastructure position first. In contrast, Tether's public actions in South Korea are more low-key, but it has not been absent. In early April, Tether personnel visited South Korea and contacted institutions such as KB Financial Group and Coinone to discuss potential cooperation. Relevant disclosures show that this round of visits continues the rhythm of

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