South Korea renews blockchain push with stablecoin law and crypto ETF plans

South Korea has reaffirmed plans to expand its blockchain and digital asset sector in the second half of 2026, pairing new blockchain initiatives with legislation for stablecoins, tokenized government bonds, and spot crypto ETFs.

South Korea’s Ministry of Economy and Finance said after Monday’s State Council meeting that blockchain development will remain part of the country’s economic growth strategy, even as artificial intelligence receives more policy attention.

Among the measures outlined for the second half of the year, the ministry said it will support large-scale blockchain pilot projects and encourage new technologies to improve the country’s digital asset ecosystem. The plan also includes moving ahead with the proposed Digital Asset Basic Act, which is expected to establish a legal framework for digital assets, including business conduct rules and standards for Korean won-pegged stablecoins.

Alongside the legislation, authorities said they will create a legal foundation for cross-border stablecoin transactions and back amendments to the Capital Markets Act that would allow South Korea to launch its first spot cryptocurrency exchange-traded funds.

Tokenized bonds and blockchain infrastructure move forward

As part of efforts to expand blockchain use in financial infrastructure, the ministry said a pilot programme for tokenized government bonds linked to an institutional central bank digital currency project will begin in 2027. The Bank of Korea will also study how the CBDC can interoperate with other blockchain networks.

The latest roadmap builds on earlier government-backed blockchain projects already under development. Earlier this month, Gyeonggi Province confirmed an eight-month proof-of-concept programme that will begin in August to test a blockchain-based stablecoin for regional currency and government payments.

According to blockchain media outlet NexBlock, the pilot is being led by blockchain security company ZKrypto and will run until February 2027. During its first stage, the project will test stablecoin issuance, circulation and settlement before later evaluating fraud prevention, privacy protections and public benefit payments. ZKrypto said the system will use zero-knowledge proofs to prevent double spending while proof-of-reserves technology will verify reserve assets throughout the trial.

The ministry also said it will examine ways to manage and trade Global Voluntary Carbon Market credits on blockchain platforms in cooperation with international organisations.

AI receives larger share of government investment

While blockchain remains part of the country’s digital economy plans, the government’s second-half strategy places stronger emphasis on artificial intelligence.

The ministry designated physical AI, AI data centres, and semiconductors as South Korea’s three national “Mega Projects.” Under the plan, the government will invest 800 trillion won (about $535.6 billion) to build semiconductor fabrication facilities in the country’s southwest, creating a second manufacturing base alongside existing plants in the capital region.

Officials also said memory chip production capacity is expected to double within five years. At the same time, South Korea plans to establish a global AI hub to attract international organisations and multilateral development banks while expanding large-scale AI data centre infrastructure.

The roadmap keeps blockchain development on the government’s agenda through new legislation, financial infrastructure pilots and tokenisation projects, while placing larger public investment behind the country’s AI and semiconductor industries.