South Korea is accelerating efforts to introduce a won-pegged stablecoin following a $115 billion shift into dollar-backed tokens in 2025, which has raised foreign exchange and policy concerns. The Bank of Korea advocates for a bank-led rollout with stringent oversight to mitigate risks to monetary stability and ensure compliance with reporting regulations. Competing KRW stablecoin projects are emerging as regulators consider flexible frameworks to meet strong domestic crypto demand. The Bank of Korea has emphasized the need for strict control over won stablecoins, describing them as "currency-like substitutes" that could disrupt monetary policy and foreign exchange stability if issued unchecked. The central bank suggests that banks should lead the initial issuance under existing regulatory standards, with expansion to other entities contingent on formal risk assessments. Meanwhile, private sector initiatives like TokenSquare's KRWQ, built on BSV blockchain technology, and a separate KRWQ stablecoin on EDX Markets are advancing despite regulatory uncertainties. Regulatory bodies remain divided on the control structures for stablecoins. The Bank of Korea supports bank-led models, while the Financial Services Commission is considering a more flexible approach similar to Europe's MiCA framework. Despite these differences, market demand for stablecoins continues to grow, with significant offshore trading activity and a robust domestic crypto investor base of approximately 18 million.