South Korea’s finance ministry said it will push ahead with a broad blockchain and digital asset agenda in the second half of 2026, pairing new rules for virtual assets with pilot projects for tokenized government bonds, won-based stablecoins and possible spot cryptocurrency ETFs.
The plan, presented during a State Council meeting, shows that Seoul is not treating blockchain policy as separate from its larger technology strategy. Instead, officials are linking digital assets, artificial intelligence, semiconductor production and data-center expansion under a wider national growth program.
The government’s message was clear: artificial intelligence remains a top priority, but blockchain and digital asset infrastructure will also receive policy support. The ministry said the country needs clearer rules, stronger market infrastructure and better links between public finance systems and new digital networks.
The measures are expected to move forward in the latter half of 2026, with several proposals aimed at preparing South Korea for more formal digital asset activity in 2027 and beyond. These include a pilot program for government bond tokenization, work on an institutional central bank digital currency project, and the enactment of a Digital Asset Basic Act.
The proposed law would create baseline rules for the domestic digital asset sector. It is expected to cover business operating standards, stablecoin regulation, user protection requirements and the treatment of digital financial products. Officials also plan to review whether existing capital markets rules should be changed to allow spot cryptocurrency exchange-traded funds in the domestic market.
A wider technology strategy
The blockchain agenda was announced alongside a much larger industrial plan centered on artificial intelligence and semiconductors. The government designated artificial intelligence, chip production and AI data centers as national “Mega Projects” for the second half of 2026.
Those projects are intended to strengthen South Korea’s position in technologies that are increasingly tied to national competitiveness, data infrastructure and advanced manufacturing. The country is already home to some of the world’s largest semiconductor companies, and officials are seeking to expand that advantage as demand for AI chips, memory products and computing power grows.
To support the semiconductor sector, authorities said they plan to direct 800 trillion won, equal to about $535.6 billion, into expanding chip fabrication facilities in the country’s southwest. The goal is to build a second major production hub outside the capital region and reduce concentration around existing industrial centers.
The government also plans to double memory chip output within five years. That target is linked to global demand for high-performance memory used in AI systems, cloud computing, data centers and advanced consumer electronics.
Alongside the chip plan, Seoul wants to create a global AI innovation hub that can attract international institutions, development banks and private technology companies. Large-scale AI data centers are expected to support that effort by providing computing capacity for research, software development and enterprise use.
Digital assets remain on the agenda
Despite the scale of the AI and semiconductor programs, officials emphasized that digital assets will remain part of the national policy roadmap.
The finance ministry said it will continue work on blockchain projects and necessary legislation in the second half of 2026. The statement suggests that the government sees digital finance as a long-term infrastructure issue, not simply a short-term market trend.
South Korea has one of the world’s most active retail cryptocurrency markets, and local traders have historically shown strong interest in digital assets. Won-denominated trading activity has also made the country an important venue in global crypto markets. That level of activity has increased pressure on policymakers to create clearer rules for stablecoins, custody, token listings, disclosures and market conduct.
Officials appear to be trying to balance two goals. On one side, they want to support financial innovation and prevent local firms from falling behind global competitors. On the other, they want to reduce risks linked to fraud, unstable tokens, weak custody practices and sudden market shocks.
The Digital Asset Basic Act is expected to be the main tool for achieving that balance.
The Digital Asset Basic Act
The proposed Digital Asset Basic Act would provide the legal foundation for South Korea’s digital asset market.
The ministry said the law will move toward enactment in the second half of the year. While specific provisions may still change during the legislative process, the act is expected to set operational standards for digital asset businesses and establish clearer rules for stablecoins pegged to the Korean won.
Stablecoins are likely to receive special attention because they can be used for payments, settlement, trading and cross-border transfers. A won-based stablecoin market could make digital payments faster and cheaper, but it could also raise concerns for monetary policy, capital controls, bank funding and consumer protection.
For that reason, officials are expected to define who can issue stablecoins, how reserves must be managed, what disclosures are required and how redemption rights should be protected. Rules may also address audits, cybersecurity, anti-money laundering controls and the role of banks or licensed financial institutions.
The act could also clarify how digital asset service providers must operate. This may include requirements for internal controls, separation of company and customer assets, reporting, risk management and compliance with financial crime rules.
For traders, clearer rules could reduce uncertainty. For companies, a defined legal framework could make it easier to launch compliant products and services. For regulators, the act would create a firmer base for supervision and enforcement.
Tokenized bonds and CBDC testing
One of the most important projects outlined by the ministry is a pilot program for tokenizing government bonds.
Tokenization means representing a financial asset, such as a bond, on a blockchain or distributed ledger. In theory, tokenized bonds can be issued, transferred and settled more efficiently than traditional securities. They may also allow for greater automation through programmable features, although the practical benefits depend on regulation, system design and market adoption.
The government bond pilot is linked to an institutional central bank digital currency project planned for 2027. Unlike a retail CBDC designed for everyday use by the public, an institutional CBDC would be used mainly by banks, financial institutions or approved entities for settlement.
The Bank of Korea is expected to study how a national digital currency could work with other blockchain networks. Compatibility will be an important issue because financial markets often rely on multiple systems that must communicate safely and quickly.
If tokenized government bonds and an institutional CBDC can be used together, settlement could become faster and less dependent on older back-office processes. Such a system could also reduce counterparty risk by allowing payment and asset delivery to occur in a more synchronized way.
However, the technical and legal challenges remain significant. Authorities will need to address security, system resilience, identity verification, privacy, interoperability and the final legal status of tokenized securities.
Stablecoins and cross-border transfers
The ministry also plans to create a legal framework for cross-border stablecoin transfers.
This is a sensitive area because stablecoins can move across borders faster than traditional payment systems. They can be useful for remittances, trade settlement and business payments, but they can also complicate oversight if not properly regulated.
A legal framework would likely define which stablecoins can be used, which entities can provide transfer services and what reporting standards must apply. It may also include rules for sanctions screening, anti-money laundering checks and cooperation with overseas regulators.
Won-pegged stablecoins are expected to be a key focus. A stablecoin tied to the Korean won could support digital payments within South Korea and possibly in trade corridors involving Korean companies. But regulators will need to ensure that such tokens are backed by high-quality reserves and can be redeemed reliably.
The government’s approach suggests that stablecoins are no longer being viewed only as speculative trading tools. They are increasingly being treated as payment and settlement instruments that require a dedicated legal structure.
Spot cryptocurrency ETFs under review
The finance ministry said it will also consider revisions to the Capital Markets Act to permit spot cryptocurrency exchange-traded funds in the domestic market.
Spot crypto ETFs hold the underlying digital asset directly, rather than tracking futures contracts or synthetic products. If allowed, these funds could give traders access to Bitcoin, Ethereum or other approved digital assets through regulated securities accounts.
The move would mark a major shift for South Korea’s financial market, where access to crypto-linked products has been limited by regulatory caution. Any approval process would likely involve strict listing standards, custody requirements, disclosure rules and risk warnings.
Authorities would also need to decide which digital assets are eligible, how market prices should be calculated and what safeguards are needed to prevent manipulation. Custody would be a central issue because spot ETFs require secure storage of the underlying tokens.
A review of the Capital Markets Act does not guarantee immediate approval. It does, however, show that officials are willing to examine whether digital assets can be brought into regulated financial markets under tighter controls.
Blockchain in carbon markets
The ministry’s plan also includes blockchain use in the Global Voluntary Carbon Market.
Voluntary carbon markets allow companies and organizations to buy credits linked to emissions reduction or removal projects. These markets have grown over the years, but they have also faced criticism over transparency, double counting and inconsistent verification standards.
Blockchain technology could help record ownership of carbon credits and track transfers more clearly. Supporters say distributed ledgers can make it easier to verify whether a credit has been issued, sold, retired or reused.
South Korea plans to work with international bodies on systems for managing and trading emissions credits. The government’s involvement suggests it wants blockchain to support not only finance but also climate-related markets.
Still, blockchain alone cannot solve all problems in carbon markets. The quality of the underlying emissions project, the credibility of verification and the strength of international standards remain more important than the technology used to record transactions.
Why the timing matters
The announcement comes as governments worldwide are reassessing digital asset policy after years of rapid growth, market failures and regulatory gaps.
South Korea’s approach appears to be moving from case-by-case oversight toward a broader legal framework. That shift could give companies more certainty, while also giving regulators stronger tools to supervise the market.
The timing also reflects competition among major economies. Countries that establish clear rules for tokenization, stablecoins and digital securities may be better placed to attract financial technology firms and blockchain developers. At the same time, weak rules could expose markets to fraud, unstable products or capital flow risks.
For South Korea, the challenge is especially important because its domestic crypto market is large and active. Local traders have shown a strong appetite for digital assets, and policymakers know that unclear rules can push activity into less transparent channels.
By linking blockchain policy with AI, semiconductors and data centers, Seoul is also signaling that it sees digital finance as part of a broader technology stack. Chips provide computing power, data centers support AI and digital platforms, and blockchain infrastructure may support new forms of settlement, recordkeeping and asset transfer.
Unanswered questions
Several major questions remain before the plans can become law and policy.
Lawmakers must still decide the final shape of the Digital Asset Basic Act. Regulators must determine how strict stablecoin reserve rules will be, whether nonbank firms can issue won-pegged tokens, and what role commercial banks will play.
The Bank of Korea’s work on CBDC compatibility will also be closely watched. If the institutional CBDC is designed to interact with blockchain networks, authorities will need to set standards for security, access and settlement finality.
The possible approval of spot cryptocurrency ETFs may take longer, especially if regulators want to study risks related to custody, pricing and market manipulation. Any change to the Capital Markets Act would require careful drafting and political support.
The semiconductor and AI projects face their own challenges. Building new fabrication hubs and data centers requires land, power, skilled labor, water supply, supply-chain coordination and long-term financing. Expanding output is not only a matter of money; it also depends on execution and global demand.
Even so, the government’s latest policy outline gives a clearer picture of South Korea’s direction. Seoul wants to remain a major player in chips and AI, while also preparing the legal and technical foundations for a more regulated digital asset economy.
The result is a technology strategy that combines hardware, software, finance and infrastructure. If the measures move ahead as planned, the second half of 2026 could become an important turning point for South Korea’s digital asset rules and its wider competition in advanced technology.
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