South Korea's Crypto Market: A Guide for the Second Half of 2026

South Korea's CBDC has entered real trading, but legislation for the Korean won stablecoin is still pending.

Written by: Ryan Yoon, Tiger Research
Compiled by: AididiaoJP, Foresight News

Summary

• The central bank digital currency (CBDC) led by the Bank of Korea has entered the second phase of the "Han River Project" for real trading tests, but there is still no legislative foundation for the Korean won stablecoin.
• The STO-related amendment has been passed, but the scope of assets allowed for issuance and licensing details are left to presidential decrees. The market's real shift depends not on the passage of the bill, but on when these details will be implemented.
• A consensus has been reached on the tokenization roadmap for stocks, bonds, and money market funds through public-private consultation mechanisms. The current focus is not on finding new fragmented investment targets, but on bringing already validated standardized securities onto the blockchain.
• Hana Bank has acquired a stake in Dunamu (6.55%, 1.0033 trillion won, approximately 733 million USD), and future asset consulting aims to acquire 97.15% of Korbit (141.4 billion won, approximately 10.3 million USD), indicating a focus not just on transaction fee income, but on positioning infrastructure for STO, RWA, and stablecoin services.
• Overseas tokenization pilots typically take 6 months to 1 year, while South Korean financial institutions are expected to finalize their budgets by early December. Those who need to act should do so now, without waiting for the details to emerge.

The Global Crypto Market is Fragmenting: Where Does South Korea Stand?

On the surface, the crypto ecosystem knows no borders. In reality, once regulatory frameworks are established in various countries, borders become clearer.

The EU has implemented MiCA, the U.S. is advancing the GENIUS and CLARITY bills, and in Asia, Singapore, Hong Kong, and Japan have each set their own directions. Major economies are incorporating the market into their systems with clear policies, but the policies differ from one another, leading to a global market that is being divided regionally.

South Korea is also building its own environment within this trend. Domestic investment demand and public interest are high, but the regulatory pace is lagging behind major economies.

Where Does South Korea's Crypto Market Stand Now?

In the first half of 2026, regulations made the market feel that crypto was about to be fully integrated into the formal financial system—STO-related bills had also passed. However, a series of statements suppressing the market, including tax discussions, have disrupted the ecosystem.

Results of the Bank of Korea's "Han River Project" Phase One (March 29, 2026)

The Bank of Korea released the first phase report of the CBDC pilot based on deposit tokens on December 18, 2025, and officially announced the start of the second phase on March 29, 2026.

The second phase is no longer just about technical validation, but about testing fund disbursement under real conditions, including electric vehicle subsidies and public expense accounts. The number of participating banks has expanded to 9, and the pilot has added peer-to-peer transfers, biometric authentication, and automatic deposit conversion. Real trading may start as early as September, but no separate deadline for testing has been set. The absence of a fixed deadline indicates that they want to make the service a continuous operation rather than a one-time demonstration.

The Han River Project has pushed the CBDC forward significantly, but the Korean won stablecoin is still far from being realized.

While the Han River Project is advancing, the second phase of the "Digital Asset Basic Law," which should institutionalize the Korean won stablecoin, has been delayed by about a year. The reason is the disagreement between the Bank of Korea and the Financial Services Commission: the Bank of Korea advocates that bank consortiums should hold at least 51%, while the Financial Services Commission believes this would stifle innovation and opposes this requirement.

Various policy alternatives have been proposed since, but legislative discussions came to a complete halt after the June local elections, and there has been no clear progress since. The government and the Financial Services Commission announced in July that they would restart discussions in the second half of the year and aim for legislation by the end of the year, but the process has been delayed again—Democratic Party lawmaker Park Min-kyu stated that after the party congress in August, a working group will be reorganized, and the bill is expected to be proposed in September.

The CBDC led by the Bank of Korea has already entered real verification and produced visible results, while the Korean won stablecoin lacks even a legislative foundation, leaving its prospects uncertain. Caution is advised regarding premature optimism about this area; it is a long-term project that will take considerable time to settle.

STO-Related Bills Passed in the National Assembly (January 15, 2026)

On January 15, 2026, the amendments to the "Electronic Registration Law for Stocks and Bonds" (Electronic Securities Law) and the "Financial Investment Services and Capital Markets Act" (Capital Markets Act) were passed in the National Assembly. After the Financial Services Commission released the "Securities Token Issuance and Circulation Regulatory Framework Restructuring Plan" in February 2023, a three-year regulatory sandbox was implemented, which has now concluded.

The amendments are built on three pillars: recognizing the legal status of distributed ledgers, introducing an issuer account management institution system, and refining the circulation roadmap for investment contract securities.

• Legal recognition of distributed ledgers: Previously, the legal forms of securities registration were limited to physical certificates and electronic securities, now expanded to blockchain-based distributed ledgers.

• Introduction of issuer account management institution system: Qualified issuers can register and manage securities directly with the Korea Securities Depository without needing financial institution intermediaries.

• More specific circulation roadmap for investment contract securities: Provides legal basis for brokerage transactions by securities companies, improving the previously fragmented secondary trading environment and liquidity of fragmented investment assets.

The amendments were announced on February 3, 2026, and will come into full effect on February 4, 2027, after a one-year grace period. It is still too early to expect the market to become active solely based on legislative foundations—key practical requirements, such as the specific scope of assets allowed for issuance, are all delegated to presidential decrees and regulatory provisions, and detailed guidelines have yet to be published.

To finalize these guidelines, the public-private cooperative token securities committee was established on March 4, 2026, and is currently discussing the details. The Financial Services Commission originally planned to announce subordinate regulations and guidelines around July 2026, but as of July 31, discussions with the legal and financial sectors are still ongoing behind closed doors, and the timeline has been pushed back. By the end of August, the working group is expected to announce between September and November.

A positive signal in the committee discussions is the inclusion of standardized securities like stocks. At the second meeting on May 15, consensus was reached on a phased roadmap: to tokenize existing standardized securities such as stocks, bonds, and money market funds, and to build on-chain settlement infrastructure. This means the market is expected to expand beyond the previously limited scope of fragmented investments.

Rather than continuing to dig for new assets like existing fragmented investment operators, it may be more beneficial to distribute validated standardized securities on-chain, potentially creating a larger market space. Domestic institutions should carefully study specific precedents and build diversified global collaborations early, so they can secure their position when the market truly matures.

Revised "Specific Financial Information Act" Takes Effect (August 20, 2026)

The revised "Specific Financial Transaction Information Reporting and Utilization Act," commonly known as the "Specific Financial Information Act" (Law No. 21358), was announced on February 19, 2026, and took effect on August 20, 2026. Not all provisions apply simultaneously on that day. The tightening of registration reviews for virtual asset service providers (VASP) will be implemented from August 20; the strengthening of travel rules and rules for transactions with overseas service providers and personal wallets will apply about six months after the enforcement order is announced, around February 2027.

• Tightening of VASP registration reviews: Increased scrutiny of major shareholders, raising financial soundness and credit requirements, and raising entry barriers (effective August 20)

• Strengthening of travel rules: The previous threshold for triggering information sharing of 1 million won (approximately 730 USD) has been removed, extending to all transactions (effective around February 2027)

• Tightening of rules for overseas service providers and personal wallets: Allowable transaction ranges will be differentiated by risk level (effective around February 2027)

The core change in VASP registration reviews is the expansion of the definition of "major shareholders." Now, the largest shareholders, those who appoint the majority of CEOs and directors, and the financial soundness and credit of the largest shareholders and representatives of the corporation if the shareholder is a legal entity must be carefully reviewed.

The strengthening of travel rules targets split transactions to evade reporting. Transfers reported between VASPs will have the information-sharing threshold expanded from 1 million won and above to all transactions, and the receiving party is also obligated to obtain this information.

Overseas transactions have also been pulled out of the regulatory blind spot. Rather than a blanket ban, there are three tiers of risk limits: transfers to low-risk overseas exchanges do not require the same name for both parties; transfers to other overseas exchanges and personal wallets are only allowed if both parties are the same person, meaning the wallet must be under the user's name; transactions with high-risk overseas exchanges are completely prohibited. For overseas transactions of 10 million won (approximately 7300 USD) and above, reported VASPs must build and operate a suspicious transaction monitoring system.

Virtual Asset Taxation No Longer Delayed (August 3, 2026)

The effective date for virtual asset taxation has been set for January 1, 2027, following the amendment of the Income Tax Act in December 2024. The government's tax reform plan in August 2026 did not include any additional delay clauses, and it will be implemented as scheduled under current law. The proposal for delay or repeal of the relevant law put forward by the People Power Party is still under review.

Another petition submitted through the National Assembly's public petition system pointed out insufficient tax infrastructure, capital outflows, and declining profits of exchanges leading to reduced corporate taxes, but there are still differences in stance between the National Assembly and the government.

Investment in Exchange Equity Heats Up

Traditional financial institutions and large capital groups are investing in virtual asset exchanges not just for returns, but to secure positions in the digital financial market ahead of time. VASP regulation makes direct entry difficult, and equity investment has become a path that can reduce regulatory risks while immediately connecting to large-scale users and liquidity.

• Dunamu (parent company of Upbit): Hana Bank acquires a 6.55% stake (1.0033 trillion KRW, approximately 733 million USD, decision made on May 15, 2026), becoming the first commercial bank to hold a significant stake. On August 18, BitGo's registration as a VASP in South Korea was approved, forming a dual structure of "Upbit equity + BitGo custody." Hanwha Investment & Securities will increase its stake to 9.84%, becoming the third-largest shareholder; the Samsung group—Samsung Securities (2%), Samsung SDS (1%), and Samsung Card (1%)—collectively acquired 4% (612.8 billion KRW, approximately 448 million USD), with roles divided in securities tokens, infrastructure, and payments.
• Korbit (acquisition completed): Future Asset Consulting acquired a 97.15% stake (141.4 billion KRW, approximately 10.3 million USD). Since the acquirer is a non-financial related company, the Fair Trade Commission's approval is interpreted as not constituting a direct investment in a financial company.
• Coinone (change of largest shareholder approved on July 22, 2026): Korea Investment & Securities and OKX Ventures each acquired a 20% stake (approximately 80 billion KRW, about 58 million USD). The shareholding structure is adjusted to CEO Cha Myung-hoon 30.36%, Com2uS Holdings 24.54%, and Korea Investment & Securities and OKX Ventures each 20%, marking a case of direct shareholding by a securities company.
• Bithumb (not yet finalized): Negotiations with Kiwoom Securities broke down on August 5 due to valuation and operational control issues, and discussions with Kakao are also stalled. The multi-layer governance structure and the second-largest shareholder Vidente holding over 32% make it difficult to sell existing shares.

Investments in exchange equity continue. From a structural perspective, investors view exchanges as the next generation of financial infrastructure—STO, RWA, and stablecoin functionalities will converge here—laying the groundwork ahead of the opening of corporate accounts and the more comprehensive entry of institutional investors.

What to Watch in the South Korean Crypto Market

As mentioned above, South Korea is in a transitional period for building its institutional framework, while regulatory barriers that hinder industry growth remain prevalent. The market direction will heavily depend on changes in corporate governance among major virtual asset service providers and legislative progress concentrated in the fourth quarter, making these turning points worth monitoring.

Trading Closing Season (September to December)

The share swap between Dunamu and Naver Financial is likely to be the first deal to materialize.

The Fair Trade Commission's review of corporate combinations has been delayed, with the completion date for the share swap pushed back twice, first from June to September, then to December 31. The shareholders' meeting has been rescheduled to November 19. Naver Financial has set a goal to go public within five years post-merger, with provisions allowing for extensions if this timeline cannot be met.

Bithumb has outlined a three-phase roadmap: seeking new investments starting in early August, submitting a pre-IPO review in 2027, and completing an IPO in 2028. However, with negotiations with Kiwoom Securities having effectively broken down and discussions with Kakao continuing to stagnate, the first step of the roadmap—this round of financing—faces the risk of falling behind.

VASP re-registration is also squeezed into the end of the year. Preliminary materials will start being submitted at the end of October, with the formal application deadline on November 20, followed by substantive reviews by the Financial Intelligence Analysis Institute. Additionally, the revised Foreign Exchange Transaction Act will come into effect in early December, requiring registration for virtual asset transfer businesses, marking another important compliance milestone.

Legislative Turning Point (National Assembly's September Regular Session)

The government version of the "Digital Asset Basic Law" draft is likely to take shape during the September regular session, proposed in the form of a member's bill. The most sensitive issue is whether private stablecoin issuers must have at least 51% of their shares held by banks, and whether to limit the shareholding ratio of major shareholders in exchanges to improve corporate governance.

At the same time, authorities view the revision of the Capital Markets Act and regulation of single-stock leveraged ETFs as urgent priorities, raising concerns that the legislative momentum for the "Digital Asset Basic Law" may be weaker than expected.

Whether this bill can pass directly relates to the institutionalization of the Korean won stablecoin and is a variable that could rewrite the market landscape in the future.

Finalization of STO Subordinate Regulations

The implementation order and guidelines for setting standards for the STO market have missed the original target of July and are still delayed as of the end of August. They are expected to be announced in the second half of the year, but no specific date has been provided.

Once the guidelines are finalized, they will clarify which underlying assets can issue security tokens, the requirements for over-the-counter exchange licenses, and investor trading limits. The Korea Securities Depository has already initiated system construction with a target for implementation by 2027. The continued delay of subordinate regulations raises concerns about a gap between issuance and circulation, leaving a period of silence.

How Companies Should Enter the South Korean Market

The domestic institutional relationship map drawn by Tiger Research shows that major institutions are still expanding cooperation comprehensively, trying to truly build up the business value chain.

Traditional financial institutions are taking the lead in setting concrete business precedents; domestic and foreign Web3 projects are increasingly concentrating resources on securing strategic partnerships with institutions rather than retail users.

This shift is partly due to the current slowdown in retail liquidity and partly due to a longer-term judgment: real value must first be created within the formal financial system before retail demand can be reignited.

Domestic Institutions: Acting First is More Important than Anything

Traditional financial institutions continue to make large-scale equity investments, but the current regulatory framework limits the space for creating real business models in South Korea. Institutions either wait for the subordinate regulations of STO to be implemented or squeeze into regulatory sandboxes for limited testing. A more effective alternative path is to first establish business operations in overseas jurisdictions where the regulations are already in place.

Passively waiting for regulatory clarity makes it difficult to maintain market position; sandboxes are also largely confined to fragmented investments, making it hard to extend into standardized securities. Therefore, even if it is currently challenging, domestic institutions should prioritize building operational capabilities centered on overseas bases.

Hong Kong has integrated security tokens into its existing financial regulatory framework, allowing secondary circulation through licensed exchanges, creating an integrated environment for issuance and trading. Singapore has high regulatory transparency but also a relatively high entry threshold. In the U.S., specific platforms can provide exemptions for issuance paths.

Domestic financial institutions with existing overseas networks should focus on the potential of their current bases rather than spending time exploring new jurisdictions. Instead of getting caught up in extensive legal interpretations, a more strategic approach is to quickly connect with leading local platforms to validate feasibility.

This window is particularly critical right now.

Overseas tokenization projects typically take six months to over a year from initial analysis to issuance and circulation. Given the timeline for STO regulation and the Electronic Securities Act, which will take effect in February 2027, now is the time to conduct overseas pilots and create synergies with the domestic market. Waiting until the domestic system is fully in place will waste over a year. Institutions should confirm specific lists and roadmaps and act now.

Web3 Projects: The Same Applies, Act Now

The first hurdle to collaborating with South Korean financial institutions is not technical capability but the qualification of the contracting entity. Even for concept validation, information security reviews and vendor registrations must be passed first; applications are often directly rejected if the applicant does not have a Korean legal entity. When local entities cannot be established, projects need a strategic structure that allows a trusted Korean partner to act as the contracting entity.

Another key variable is the unique budget cycle of South Korean financial institutions. Most institutions begin drafting their strategies for the next year in October and finalize budget allocations in early December. Once the budget is executed in January, available resources can quickly be depleted, and the momentum for advancing new projects declines sharply. Projects intending to do business with these institutions should view the current period as a proposal window—missing it will significantly reduce the chances of moving the project forward.

Retail strategies also need a complete overhaul. The current market slowdown is part of a broader global downturn, making it difficult for retail marketing to achieve the same effects as in the past. The narrative now needs to focus on actual performance rather than promotion. Institutional endorsements have reached a point where a simple memorandum of understanding cannot move the market; obtaining substantial performance references has become a more important strategy.

Many foundations are also completely cutting retail budgets. However, AI has reduced costs, and unless projects are prepared to completely abandon retail outreach, a better approach is to spend retail expenditures more effectively rather than implementing a one-size-fits-all approach.

Observing Market Changes Window

The rapid changes in South Korea's virtual asset market and the push towards institutionalization are expected to become clearer and more concrete around the Korea Blockchain Week (KBW2026) scheduled for September 2026. KBW2026 is anticipated to be more than just a venue for technical, academic exchanges, or social gatherings; it will become a place for substantial discussions between traditional finance and the Web3 ecosystem.

The main focus of this year's event is expected to shift away from retail marketing towards multi-party strategic discussions among financial institutions, policy authorities, and major virtual asset service providers: how to build business models within the formal financial system according to regulatory guidelines and create real use cases.

Domestic and foreign enterprises and research institutions should closely analyze the policy recommendations and inter-institutional cooperation roadmaps presented at KBW2026 to secure early positioning in the soon-to-be-fully-formed institutional virtual asset market.