South Korea's Cryptocurrency Market: Latest Guide for the Second Half of 2026

Key Takeaways

• The Bank of Korea's CBDC has begun real transaction verification through Project Han River Phase 2, but there is currently no legislative basis for a won-based stablecoin.
• The revised bill for the STO market has passed, but the scope of permissible assets and detailed approval requirements are delegated to presidential decrees. The actual direction of the market will be determined not by the passage of the bill but by the announcement of subordinate regulations.
• As the working group has reached a consensus on building a roadmap for the tokenization of stocks, bonds, and MMFs, there is a need to focus on on-chain transformation of already proven demand for structured securities rather than discovering new fractional investment assets.
• The large-scale investments by Hana Bank (6.55% stake in Dunamu, 1.033 trillion won) and Mirae Asset Consulting (97.15% stake in Korbit, 141.4 billion won) are not merely for commission revenue but are aimed at securing next-generation infrastructure where STO, RWA, and stablecoins will converge.
• While overseas tokenization pilot projects take at least 6 months to a year, the budget for domestic financial institutions will be finalized and closed by early December. It is necessary to implement immediately rather than adopt a passive attitude waiting for detailed regulations to be finalized.

1. Fragmentation of the Global Virtual Asset Market and South Korea

On the surface, the virtual asset ecosystem appears to be borderless, but in reality, regulations are being established in each country, making borders more defined.

[Tyger Research, Ryan Yoon] For example, the EU is implementing MiCA, the US is promoting the GENIUS and CLARITY acts, and regulations are being established in Asia, including Singapore, Hong Kong, and Japan. While major countries are embracing the market with clear policies, the global market is becoming fragmented by region due to policy differences.

In this trend, South Korea is also building its own environment. Although South Korea has a very high level of investment demand and public interest, it is somewhat lagging behind major countries in terms of speed.

2. Where Has South Korea's Virtual Asset Market Come to Today?

In the first half of 2026, South Korea's regulatory environment was expected to incorporate into the system with the passage of STO-related bills, but statements suppressing the market, including discussions on taxation, have led to increased confusion within the ecosystem.

2.1. Bank of Korea Project Han River Phase 1 Results (March 29, 2026)

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The Bank of Korea released the first result report of the deposit token-based CBDC real transaction pilot on December 18, 2025, and officially announced the start of Phase 2 on March 29, 2026.

Phase 2 goes beyond simple technical verification to demonstrate actual conditional fund execution, such as electric vehicle subsidies and business expenses. The number of participating banks has expanded to nine, and features such as P2P remittance, biometric authentication, and automatic deposit conversion have been added. The start of real transactions is expected as early as September, but no separate testing period has been set. This is a measure for the continuous operation of the service beyond a one-time demonstration.

While the CBDC is making strides centered around Project Han River, the won-based stablecoin still has a long way to go.

While Project Han River is making progress, the second phase of the Digital Asset Basic Law for the institutionalization of the won-based stablecoin has been delayed by about a year. The core reason is the disagreement between the Bank of Korea and the Financial Services Commission. The Bank of Korea has insisted on securing more than 51% of the bank consortium's shares, while the Financial Services Commission opposed this, citing concerns about hindering innovation.

Since then, various policy alternatives have been proposed, but legislative discussions have been completely halted due to the impact of the June local elections, leaving the situation stagnant without clear progress. The government and the Financial Services Commission announced plans to reinitiate in the second half of July and aim for legislation within the year, but with Democratic Party lawmaker Park Min-kyu, a member of the National Assembly's Political Affairs Committee, forecasting the reorganization of the TF after the August party convention and the introduction of the bill in September, delays are occurring once again.

Thus, while the CBDC led by the Bank of Korea has already entered the stage of real transaction proof and is yielding visible results, the won-based stablecoin remains in an opaque state without even a legislative basis. Therefore, one must be cautious of premature optimism in this field and clearly recognize that it is a long-term task that will take considerable time to settle in the market.

2.2. Passage of STO-related Bills in the National Assembly (January 15, 2026)

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On January 15, 2026, the revised "Electronic Securities Act" and "Capital Markets Act" passed the National Assembly's plenary session. This marks the end of the regulatory sandbox system that has continued for three years since the Financial Services Commission announced the "Regulatory Framework for Token Securities Issuance and Distribution" in February 2023.

The core points of the revised bill can be summarized into three pillars: 1) Recognition of the legal status of distributed ledgers, 2) Introduction of an issuer account management institution system, and 3) Specification of a roadmap for the distribution of investment contract securities.

• Recognition of the legal status of distributed ledgers: Expanding the registration form of securities, which was previously limited to physical and electronic securities, to include blockchain-based distributed ledgers, thereby granting legal effect.
• Introduction of an issuer account management institution system: Allowing qualified issuers to secure operational authority to directly register and manage securities with the Korea Securities Depository without the mediation of financial institutions.
• Specification of a roadmap for the distribution of investment contract securities: Improving the secondary trading environment and market liquidity of fragmented fractional investment assets by establishing a basis for brokerage by securities firms.

The revised bill was promulgated on February 3, 2026, and is set to be implemented from February 4, 2027, after a one-year grace period. However, it is premature to expect immediate market activation just because legislative grounds have been established. This is because specific core requirements, such as the scope of permissible assets, are delegated to presidential decrees and supervisory regulations, and detailed guidelines have not yet been announced.

To prepare these guidelines, a public-private joint "Token Securities Working Group" was launched on March 4, 2026, to discuss detailed plans. The Financial Services Commission initially planned to announce subordinate regulations and guidelines around July 2026, but as of July 31, it remained in the stage of collecting private opinions from the legal and financial sectors, causing delays in the schedule. As of the end of August, the working-level staff is predicting the announcement timing to be between September and November.

A positive aspect of the working group's discussions is the inclusion of structured securities such as stocks. In the second meeting held on May 15, consensus was reached on establishing a phased roadmap that includes the tokenization of existing structured securities such as stocks, bonds, and MMFs, as well as the construction of on-chain payment infrastructure. Accordingly, the market, which has been limited to "fractional investment," may expand.

Therefore, rather than focusing on discovering new assets like existing fractional investment operators, it is more likely to create greater market opportunities by proactively implementing models that distribute structured securities with already proven demand on-chain. Consequently, domestic institutions should analyze practical best practices closely and proactively build diverse global partnerships to secure leadership in rapid execution in line with the full-scale opening of the market.

2.3. Implementation of the Amendment to the Specific Financial Information Act (August 20, 2026)

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Summary:

The amended law on the Specific Financial Information Act (Act No. 21358), which was announced on February 19, 2026, came into effect on August 20, 2026. However, not all of the amendments are applied at once on this day. The strengthening of the reporting examination for virtual asset service providers took effect on August 20, but the enforcement of the travel rule and regulations on transactions with overseas operators and personal wallets will apply around February 2027, six months after the enforcement decree is announced.

• Strengthening of Reporting Examination for Virtual Asset Service Providers: Introduction of major shareholder examination, raising financial soundness and credit requirements, increasing entry barriers (effective from 8.20).
• Strengthening of the Travel Rule: Abolishing the previous threshold of 1 million KRW for information provision obligations and expanding it to all transactions (expected to apply in 2027.2).
• Strengthening Regulations on Transactions with Overseas Operators and Personal Wallets: Differentiating the scope of permitted transactions based on risk levels (expected to apply in 2027.2).

The reporting examination for virtual asset service providers focuses on expanding the definition of major shareholders. It includes the largest shareholders, shareholders who appoint a majority of the representative directors and directors, as well as the largest shareholders and representatives of corporations, ensuring a thorough review of financial soundness and credit requirements.

The strengthening of the travel rule targets split remittances. The information provision obligation for transfers between reported virtual asset service providers is expanded from transactions over 1 million KRW to all transactions, and the receiving service provider is also required to secure information.

Transactions with overseas operators will also be regulated. Instead of a complete ban, there will be a three-tier differential regulation based on risk levels. Transfers to low-risk overseas exchanges will be allowed without the same requirements for senders and receivers, while other overseas exchanges and personal wallets will only be permitted if the sender and receiver are the same, i.e., only to wallets in the sender's name. Transactions with high-risk overseas exchanges will be completely prohibited. For transactions over 10 million KRW with overseas exchanges and personal wallets, reported virtual asset service providers must establish and operate their own suspicious transaction management systems.

2.4. Exclusion of Additional Tax Deferral Provisions for Virtual Assets (2026.8.3)

The taxation of virtual assets has been confirmed to take effect on January 1, 2027, with the amendment of the Income Tax Act in December 2024, and the exclusion of additional deferral provisions from the government's tax reform plan in August 2026 means that it will be implemented as scheduled under current law. However, there are still pending bills from the People Power Party regarding deferral and repeal.

Additionally, petitions raised through the National Assembly's public petition system point out the inadequacies of the tax infrastructure, the outflow of capital overseas, and the decrease in corporate taxes due to the poor performance of major exchanges, but the responses from the National Assembly and the government remain divided.

2.5. Intensification of Equity Investment in Exchanges

The reason for traditional financial institutions and large capital to secure stakes in virtual asset exchanges goes beyond profit generation; it is to seize the initiative in the digital financial market. In a situation where direct entry is difficult due to VASP regulations, equity investment is an efficient alternative that reduces regulatory risk while immediately securing a large user base and liquidity.

• Dunamu (Upbit's Parent Company): Hana Bank acquired 6.55% (1.033 trillion KRW, resolution on May 15, 2026), becoming the first commercial bank to secure a large stake. On August 18, with the acceptance of Bitgo Korea's VASP report, it completed a dual entry structure with stakes in Upbit and Bitgo custody. Hanwha Investment & Securities increased its stake to 9.84%, becoming the third-largest shareholder, while Samsung affiliates (2% in securities, 1% in SDS, 1% in cards) acquired a combined 4% (612.8 billion KRW), establishing a role-sharing system for token securities, infrastructure, and payments.
• Korbit (Acquisition Completed): Mirae Asset Consulting secured a 97.15% (141.4 billion KRW) stake, completing the acquisition. The acquirer is a non-financial affiliate, Mirae Asset Consulting, and the Fair Trade Commission's approval is explained as not being a direct investment by a financial company.
• Coinone (Change of Major Shareholder Completed on July 22, 2026): Korea Investment & Securities and OKX Ventures each secured 20% (around 80 billion KRW each). The share structure has been reorganized to include CEO Cha Myung-hoon at 30.36%, Com2uS Holdings at 24.54%, and Korea Investment & Securities and OKX Ventures each at 20%, representing a case of direct shareholding by securities firms.
• Bithumb (Unconfirmed): Negotiations with Kiwoom Securities were effectively halted on August 5 due to disagreements over valuation and management rights, and discussions with Kakao are also prolonged. The complex ownership structure and the substantial stake (over 32%) of the second-largest shareholder, Vidente, make it difficult to sell existing shares.

Thus, equity investments in exchanges are continuing, and in the long term, exchanges are viewed as the next-generation financial infrastructure where STO, RWA, and stablecoins converge, with plans to prepare for the opening of corporate accounts and the full-scale entry of institutional investors in the future.

3. What to Expect in the Korean Virtual Asset Market Starting Tomorrow?

As previously discussed, Korea is in a transitional period of establishing a regulatory framework, but at the same time, there are also regulatory barriers that hinder industrial growth. The direction of this market is expected to be significantly influenced by the restructuring of governance and legislative progress of major virtual asset service providers concentrated in the fourth quarter, so it is essential to closely monitor the turning points during that period.

3.1. Deal Closing Season (September to December)

The stock exchange issue between Dunamu and Naver Financial is expected to be resolved first.

Due to delays in the Fair Trade Commission's review of corporate mergers, the completion date for the comprehensive stock exchange has been postponed twice from June to September and then to December 31. Accordingly, the schedule for the shareholders' meeting has been adjusted to November 19, and Naver Financial aims to go public within five years after the merger, with provisions to extend the deadline if necessary.

Bithumb has presented a specific three-step roadmap starting with new investment attraction in early August, with plans for preliminary listing review in 2027 and IPO completion in 2028. However, with negotiations with Kiwoom Securities effectively breaking down and discussions with Kakao also stalling, there are concerns that the timeline for the first step of the roadmap, investment attraction, may be delayed.

Additionally, the re-reporting process for virtual asset service providers (VASP) is also concentrated at the end of the year. Preliminary submissions will begin at the end of October, with the main application deadline on November 20, followed by a thorough review by the FIU. Furthermore, with the implementation of the amended Foreign Exchange Transaction Act in early December, registration for virtual asset transfer businesses will become mandatory, marking an important turning point in terms of regulatory compliance.

3.2. Legislative Turning Point (September Regular National Assembly)

The government draft of the Digital Asset Basic Act is likely to be visualized in the form of a member's bill during the September regular National Assembly session. Among these, the most sensitive issue is whether to mandate that private-issued stablecoins secure more than 51% of bank shares and whether to limit major shareholder stakes to improve the governance of exchanges.

However, there are concerns that the urgency of amending the Capital Market Act for single-item leveraged ETF regulations may weaken the legislative momentum more than expected.

The passage of this bill is directly linked to the success or failure of the institutionalization of the Korean won stablecoin, and it is expected to serve as the most decisive variable that will shake the future market landscape.

3.3. Confirmation of Sub-regulations for STO

The announcement of the enforcement decree and guidelines, which will serve as detailed criteria for the STO market, has been delayed beyond the originally targeted July and is now expected to be announced by the end of August. While the specific date remains undecided, it is anticipated that once the guidelines are finalized, the scope of underlying assets eligible for issuance as token securities, requirements for approval of over-the-counter exchanges, and limits on investor transactions will be clarified. The Korea Securities Depository has begun building a system with a target implementation in 2027, but there are growing concerns about market gaps due to delays in establishing sub-regulations, which could lead to a time lag between actual issuance and circulation.

4. How Should Businesses Operate in Korea?

As indicated by the domestic institutional partnership status presented by Tiger Research, major institutions are continuously expanding their collaborative relationships to build a practical business value chain.

Leading institutions, primarily from the traditional financial sector, are focusing on establishing practical business best practices, while domestic and international Web3 projects are also concentrating their efforts on securing strategic partnerships with institutions rather than retail. This shift is partly due to the current liquidity slowdown in the retail market, but strategically, it is also a recognition that substantial value creation within the regulatory framework must precede a resurgence in retail demand.

4.1. Domestic Institutions: The Importance of Attempts {#rps-14}

Despite large-scale equity investments from traditional financial institutions, there are constraints in deriving practical business models within the current regulatory framework. Ultimately, they are left waiting for the finalization of STO sub-regulations or limited demonstrations through regulatory sandboxes, and the most effective alternative is to proactively implement business operations in jurisdictions where institutional frameworks are already established.

A passive response that merely waits for regulatory adjustments clearly has limitations in securing market leadership, and the sandbox track is also confined to a narrow scope of fractional investments, making it difficult to expand into standardized securities. Therefore, domestic institutions must prioritize securing practical capabilities centered around overseas bases, which are currently the most challenging yet necessary tasks.

Hong Kong manages security tokens within its existing financial regulatory framework and allows secondary trading through licensed exchanges, providing an integrated environment for issuance and trading. Singapore offers excellent transparency in its regulations, but the entry barriers are significantly high, while the United States has opened pathways for issuance through regulatory exemptions when utilizing specific platforms.

Thus, domestic financial institutions that already possess overseas networks should prioritize assessing the feasibility of utilizing existing bases rather than spending time exploring new jurisdictions. A strategic approach that quickly probes the feasibility of execution through practical meetings with local leading platforms is required rather than getting bogged down in extensive legal interpretations.

Now is a crucial golden time. The overseas tokenization process typically takes over 6 months to a year from initial analysis to issuance and distribution. Considering the domestic STO regulations and the implementation of the Electronic Securities Act in February 2027, now is the right time for overseas demonstrations targeting the domestic market. If actions are taken only after regulatory adjustments, it would result in wasting over a year, so a concrete checklist and roadmap should be confirmed to take action now.

4.2. Web3 Projects: Likewise, Take Action Now {#rps-15}

The first hurdle for collaboration in the domestic financial sector is not technological capability but 'contractual eligibility of the parties.' Even during the PoC process, information security reviews and the registration of partner companies must precede, and cases where registration is denied due to the absence of a domestic entity are frequent. If establishing a local entity is challenging, a strategic structure design that positions a credible domestic partner as the contracting party is necessary.

Another key variable is the unique 'budget allocation cycle' of domestic financial institutions. Most financial institutions begin formulating strategies for the next year from October and finalize resource allocation in early December. After January, when actual budgets are executed, the available resources are depleted, and the momentum for launching new projects sharply declines. Therefore, if you are considering business with these institutions, now is the golden time for proactive proposals, and missing this window could significantly reduce the chances of successful commercialization.

Finally, a complete revision of retail strategies is also necessary. The current market slowdown stems from a global market recession, making it difficult for retail promotions to achieve the same effects as before. Currently, messages focused on 'performance' are needed. Since many institutional references have already accumulated, the market does not respond to simple MOUs, making it crucial to secure meaningful reference strategies.

Additionally, many foundations are completely abolishing their retail budgets, as costs are decreasing due to AI technology, so rather than complete abolition, they should consider efficiency as long as they do not abandon retail touchpoints.

5. An Opportunity to Observe Market Changes {#rps-16}

The rapid environmental changes in the domestic virtual asset market and the trend towards regulatory inclusion are expected to become clearer and more concrete with the upcoming KBW2026 (Korea Blockchain Week 2026) in September. KBW2026 will be an important event that goes beyond simple technical academic exchanges or networking events, discussing substantial changes between the existing traditional financial sector and the Web3 ecosystem.

In particular, this event is expected to form the main trend and mainstream of the market through multifaceted strategic discussions among financial institutions, policy authorities, and large virtual asset operators to build business models and establish practical application cases based on compliance with regulatory guidelines within the institutional framework, rather than simple marketing targeting retail.

Accordingly, related domestic and international companies and research institutions should meticulously analyze the various policy suggestions and inter-institutional cooperation roadmaps presented during KBW2026, using it as an opportunity to seize market leadership in the forthcoming fully developed institutional virtual asset market.