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Building a Compliant IBFC Bank and Internet Banking Model in South Korea’s Emerging Digital Asset Era

General Report June 14, 2025
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TABLE OF CONTENTS

  1. South Korea’s Digital Asset and Stablecoin Regulatory Framework
  2. Incheon Free Economic Zone and IBFC License Pathway
  3. Structuring an Internet Banking Operation under the New Act
  4. Leveraging Stablecoin Issuance and Cross-Border Payment Infrastructure
  5. Corporate Governance and Investor Infrastructure for World Making Members
  6. Future Directions: Tokenized Shipping Investment and Business Expansion
  7. Conclusion

1. Summary

  • South Korea's digital asset regulatory environment is undergoing significant transformation, particularly under the leadership of President Lee Jae-myung. The onset of the Digital Asset Basic Act on June 10, 2025, marks a transformative step in establishing a legal framework for digital assets, facilitating the issuance of local stablecoins and delineating responsibilities between regulatory bodies, namely, the Bank of Korea (BOK) and the Financial Services Commission (FSC). The Act aims to lower barriers for stablecoin issuance, enabling wider participation from various firms while enhancing consumer protections through mandated reserve requirements for issuers. Recent data underscores the importance of this initiative, highlighting a staggering growth to 57 trillion won ($42 billion) in stablecoin transactions in Q1 2025 alone, thereby solidifying the potential role of stablecoins in stabilizing South Korea's financial landscape amidst global market pressures.

  • In conjunction with regulatory reforms, establishing Investment Banking and Financial Companies (IBFC) in the Incheon Free Economic Zone (IEZ) presents a robust pathway for operationalizing international banking services. The IBFC framework is designed to attract foreign investments by streamlining licensing procedures, granting access to competitive transaction policies, and offering tax incentives. These strategic initiatives align closely with the Lee administration’s broader goal of enhancing South Korea's global financial competitiveness while ensuring economic growth within the region.

  • Furthermore, the integration of comprehensive internet banking operations under the Digital Asset Basic Act is poised to enhance service delivery in the financial domain. The establishment of digital banks is anticipated to adhere to stringent capital requirements and governance frameworks, thereby fostering trust and transparency. The regulatory landscape necessitates robust AML/KYC policies as institutions prepare to embrace sophisticated verification technologies, ensuring compliance with both domestic and international standards.

  • Overall, World Making Members Co. Ltd. stands to benefit significantly from this regulatory milieu, positioning itself as a leader in the nascent digital asset economy by implementing a well-rounded strategy focused on corporate governance, innovative financial products, and establishing a secondary market for tokenized shipping investments.

2. South Korea’s Digital Asset and Stablecoin Regulatory Framework

  • 2-1. Overview of the Digital Asset Basic Act (June 10 2025)

  • On June 10, 2025, President Lee Jae-myung's administration introduced the Digital Asset Basic Act, a landmark piece of legislation aimed at regulating digital assets and facilitating the issuance of local stablecoins. This act shifts the regulatory oversight of stablecoin issuance from the Bank of Korea (BOK) to the Financial Services Commission (FSC), marking a significant change in the regulatory landscape. The legislation establishes a much lower barrier for companies wishing to issue stablecoins, dropping the minimum required equity capital from 5 billion won (approximately $3.6 million) to 500 million won (around $368,000). This adjustment is designed to stimulate the local market, enabling more firms to participate in stablecoin issuance. The act also requires stablecoin issuers to maintain sufficient reserves to guarantee refunds, establishing a safety net for investors and users, which reflects a growing emphasis on consumer protection in the digital asset space.

  • The introduction of the Digital Asset Basic Act aligns with the global trend towards clearer regulations for digital assets, aiming to enhance transparency and foster competition within South Korea's burgeoning crypto market. Data from the Bank of Korea indicates that transactions involving stablecoins on major local exchanges surged to 57 trillion won ($42 billion) in the first quarter of 2025 alone. The act is anticipated to further entrench stablecoins in the financial landscape, ultimately aiding in the reduction of capital flight and enhancing monetary sovereignty.

  • 2-2. Won-pegged stablecoin bill and legislative status

  • The legislative efforts surrounding won-pegged stablecoins are rapidly unfolding under the current administration. As part of the Digital Asset Basic Act, the proposed regulations aim to create a framework that promotes the issuance and use of stablecoins pegged to the South Korean won, reflecting President Lee's goal to prevent capital outflows to foreign stablecoins, such as USDT and USDC.

  • Reports indicate that the Bank of Korea (BOK) is supportive of a regulated framework for local stablecoin issuance, although there remains caution regarding non-bank issuers. Upcoming meetings scheduled for June 23, 2025, between BOK officials and banking leaders will further discuss stablecoin policy, ensuring alignment with monetary policy and financial stability objectives. Amid political momentum and public interest, the cooperative efforts between the BOK and the FSC will likely shape how this legislative framework will evolve and how resilient it will be against global tendencies towards dollarization in the cryptocurrency space.

  • 2-3. Bank of Korea’s engagement and policy stance

  • The Bank of Korea has remained actively engaged in discussions surrounding digital assets, particularly in the context of the new regulatory framework for stablecoins. Governor Rhee Chang-yong has expressed the central bank's interest in establishing a robust dialogue with commercial banks to formulate effective strategies for implementing stablecoin regulations. As South Korea progresses towards allowing won-backed stablecoins, the BOK continues to express its concerns regarding the implications of non-bank stablecoins on monetary policy effectiveness.

  • The BOK advocates for a cautious approach to avoid undermining its control over monetary matters, suggesting that any approval for stablecoin issuers should involve regulatory oversight. The central bank has highlighted that while digital currencies provide innovation, there are potential risks of financial instability that needs to be carefully managed as South Korea transitions towards a more liberalized digital asset economy.

  • 2-4. Regulatory expectations under President Lee’s administration

  • President Lee Jae-myung's tenure symbolizes a proactive shift towards embracing digital assets regulation in South Korea. His administration has committed to creating a comprehensive legal framework that not only regulates stablecoins but also enhances the overall clarity and transparency of the digital asset environment. This initiative reflects a broader ambition to position South Korea as a leading player in the global cryptocurrency landscape. The expectation is that the regulatory measures under President Lee's administration will streamline compliance requirements for digital asset businesses while safeguarding investor interests. Key objectives include promoting fair competition, enhancing consumer protection, and attracting international investments in digital finance. Under this framework, the administration is also keen to explore avenues for incorporating cryptocurrencies into institutional portfolios, which signifies an evolving recognition of cryptocurrency's role in modern finance. Facilitating regulatory engagement and collaborative governance will be essential in addressing the complexities of this rapidly developing market.

3. Incheon Free Economic Zone and IBFC License Pathway

  • 3-1. Regulatory scope of IBFC licenses in the Incheon IEZ

  • The regulatory framework governing Investment Banking and Financial Companies (IBFC) within the Incheon Free Economic Zone (IEZ) is designed to enhance South Korea's competitiveness in the global financial market. The IBFC licenses, which are pivotal for attracting investment, will enable banks to offer a wider array of services tailored to international investors. These licenses aim to streamline operational procedures and provide a flexible environment conducive to fintech innovations, thereby positioning the Incheon IEZ as a premier financial hub in Asia.

  • 3-2. Legal requirements and application process

  • Securing an IBFC license within the Incheon IEZ involves navigating a well-defined legal framework. Applicants must fulfill specific criteria, including compliance with capital adequacy standards and adherence to local regulations. The application process requires the submission of detailed business plans, governance structures, and risk management strategies. Furthermore, prospective IBFCs are advised to prepare for rigorous vetting by regulatory authorities to ensure that they align with South Korea's strategic economic objectives.

  • 3-3. Benefits for cross-border fund transfers and tax incentives

  • One of the foremost advantages of obtaining an IBFC license in the Incheon IEZ is the facilitation of cross-border fund transfers. The proximate location to international markets allows IBFCs to leverage competitive exchange rates and expedited transaction processes. Additionally, the South Korean government is expected to offer tax incentives to attract foreign investments, further enhancing the appeal of setting up an IBFC in this economic zone. These incentives can play a significant role in reducing operational costs, thereby incentivizing global investors to engage with local entities.

  • 3-4. Alignment with Lee administration’s foreign investment goals

  • The Lee administration has emphasized the importance of attracting foreign direct investments (FDI) as part of its broader economic strategy. Establishing IBFCs in the Incheon IEZ is aligned with this goal, as it offers a regulatory framework that is favorable to foreign investors. The government is actively working to ensure that the licensing process is both efficient and accommodating, which reflects its commitment to fostering a business-friendly environment. This strategy not only aims to boost South Korea's standing in the international financial community but also to create sustainable economic growth opportunities.

4. Structuring an Internet Banking Operation under the New Act

  • 4-1. Capital requirements and corporate governance setup

  • Under the new Digital Asset Basic Act, establishing an internet banking operation will require adherence to stringent capital requirements, reflecting both financial robustness and compliance with regulatory expectations. The legislative framework mandates that digital banks maintain a minimum capital reserve as a buffer against operational risks, similar to traditional banks. Furthermore, the governance structure of the internet banks must emphasize transparency and accountability, necessitating the establishment of a board of directors that includes representatives from diverse backgrounds related to finance, technology, and legal compliance. This approach will not only ensure regulatory adherence but also foster stakeholder trust in a rapidly evolving digital landscape.

  • 4-2. AML/KYC and digital identity verification protocols

  • As South Korea tightens its regulations surrounding cryptocurrencies and digital banking, robust Anti-Money Laundering (AML) and Know Your Customer (KYC) measures will be pivotal for any new internet banking operation. These protocols will necessitate the implementation of advanced digital identity verification systems capable of securely authenticating the identities of customers, which is crucial for preventing fraudulent activities and ensuring compliance with both local and international financial regulations. Banks will be required to integrate sophisticated technology solutions, such as biometric identification and blockchain-based identity management, to streamline these processes while safeguarding user privacy. The South Korean Financial Services Commission (FSC) has indicated that the revised AML/KYC rules should begin taking effect concurrently with the initiation of digital banking operations in late 2025.

  • 4-3. Partnerships with existing banks and fintech platforms

  • To facilitate a smoother entry into the market, new internet banking entities are encouraged to form strategic partnerships with established banks and fintech platforms. These alliances could provide essential infrastructure support, customer acquisition strategies, and access to pre-existing financial networks. Collaborating with seasoned banks can also enhance credibility and allow for shared knowledge in navigating regulatory compliance. Such partnerships will be vital in leveraging the latest fintech innovations to offer competitive and user-friendly digital banking services that address the unique needs of customers looking to engage with digital assets. The growing recognition of the importance of collaboration in the fintech sector underscores the shift towards integrated service models that encapsulate both traditional and digital finance.

  • 4-4. Integration of digital asset services within an internet bank

  • The integration of digital asset services into the operational model of internet banks represents a significant step forward in modern banking practices. Under the provisions of the Digital Asset Basic Act, internet banking operations will be expected to offer services that include the provision of cryptocurrency wallets, trading platforms, and other services linked to digital assets. This not only aligns with the increasing demand for cryptocurrency access but also positions internet banks as pioneers in a hybrid financial ecosystem. Additionally, such integration underscores the importance of developing robust cybersecurity measures and ensuring regulatory compliance concerning digital transactions and asset custody, as articulated in recent discussions by the Bank of Korea. These services are anticipated to play an essential role in attracting a tech-savvy customer base and solidifying the market position of newly established banks in South Korea.

5. Leveraging Stablecoin Issuance and Cross-Border Payment Infrastructure

  • 5-1. Designing a won-pegged stablecoin under the Digital Asset Basic Act

  • The Digital Asset Basic Act, passed on June 10, 2025, allows for local stablecoin issuance, with a focus on creating won-pegged stablecoins. This legislative framework aims to minimize regulatory barriers, allowing companies to issue stablecoins with a reduced equity capital requirement of just 500 million won (approximately $368,000). The goal of establishing a won-backed stablecoin market is not only to streamline cross-border transactions but also to prevent the outflow of capital to foreign dollar-pegged coins. As stablecoin adoption grows in South Korea, the government’s proactive stance under President Lee Jae-myung positions the country to capture a significant share of the digital asset ecosystem and bolster its monetary sovereignty.

  • 5-2. CASP licensing requirements for issuance and custody

  • Under the newly enacted Digital Asset Basic Act, the issuance and custody of stablecoins will now fall under the jurisdiction of the Financial Services Commission (FSC), shifting authority away from the Bank of Korea. This new structure entails stringent licensing requirements for Crypto Asset Service Providers (CASPs) that seek to issue stablecoins. These requirements include minimum reserve mandates, operational transparency, and appropriate consumer protection measures, addressing concerns for investors and regulators alike. The introduction of these requirements is a vital move, as it aims to create a secure and trustworthy environment for both issuers and users, ensuring compliance with global standards.

  • 5-3. Technical integration for real-time remittances

  • Achieving seamless cross-border payments hinges on effective technical integration between stablecoin infrastructure and existing financial systems. The overarching aim is to facilitate real-time remittances utilizing won-pegged stablecoins, which could significantly lower transaction costs and enhance the speed of cross-border transactions. The potential alignment with blockchain technology offers a decentralized and transparent method for transferring value internationally, which could attract both domestic and international investors looking for efficient payment solutions. The success of these integrations will depend on the collaboration between traditional banking institutions and fintech companies to build robust, interoperable systems.

  • 5-4. Compliance with global payment and AML standards

  • To ensure the legitimacy and safety of the stablecoin ecosystem in South Korea, compliance with global payment and anti-money laundering (AML) standards is essential. As the Digital Asset Basic Act comes into effect, it will integrate the nation’s AML policies with the new stablecoin framework. This commitment aligns South Korea with international best practices and contributes to building trust among users and global investors. Furthermore, strong compliance measures will be required for all CASPs, focusing on Know Your Customer (KYC) protocols to mitigate risks associated with digital assets and prevent the misuse of stablecoins for illicit activities. By fostering a compliant financial environment, South Korea aims to become a leader in the digital asset arena while safeguarding its financial stability.

6. Corporate Governance and Investor Infrastructure for World Making Members

  • 6-1. Legal structuring of World Making Members Co. Ltd. (589-88-01039)

  • The foundational legal structure of World Making Members Co. Ltd. will be pivotal in achieving compliance with both local and international regulatory standards. As it stands, crafting a robust legal framework encompasses defining corporate bylaws, shareholder agreements, and compliance protocols that align with South Korea's business laws as well as international practices for corporate governance. This structure will facilitate the successful establishment of the company and its future endeavors in the digital asset market.

  • 6-2. Board composition, reporting, and risk management

  • The composition of the board of directors will be critical for the effective governance of World Making Members Co. Ltd. A diverse board with expertise in digital banking, regulatory affairs, and technology integration will enhance decision-making processes. Moreover, establishing clear reporting lines and risk management protocols will ensure accountability and transparency. Regular assessments of the company's risk profile will help in identifying potential vulnerabilities, thereby allowing proactive measures to be taken to mitigate risks.

  • 6-3. Investor relations, audit processes, and transparency

  • The development of a comprehensive investor relations strategy will be paramount for World Making Members Co. Ltd. This includes creating mechanisms for regular communication with investors regarding company performance and strategic initiatives. Additionally, robust audit processes will need to be implemented to maintain a high standard of financial accuracy, adhering to both local accounting principles and international financial reporting standards. Transparency in operations and financial disclosures will be fundamental to building investor trust and confidence.

  • 6-4. Technology stack and operational infrastructure

  • A sophisticated technology stack is essential for World Making Members Co. Ltd. to operate effectively within the digital asset sphere. This includes the selection of secure blockchain platforms for asset management, transaction processing, and compliance with regulatory requirements. The operational infrastructure must also incorporate efficient data management systems and customer relationship management tools to streamline operations and enhance user experience. Investing in cutting-edge technology will position the firm as a competitive player in the emerging digital economy.

7. Future Directions: Tokenized Shipping Investment and Business Expansion

  • 7-1. Tokenization of global shipping assets

  • The tokenization of shipping assets represents a transformative approach that aims to enhance liquidity and accessibility in maritime logistics. This involves creating digital tokens that represent ownership or rights over physical shipping vessels and shipping-related assets, enabling fractional ownership. By June 14, 2025, the groundwork laid by regulatory frameworks like the Digital Asset Basic Act will permit the issuance of these tokens in a compliant manner. This regulatory compliance is essential for building trust among investors and stakeholders, as it assures them that their investments are safeguarded under established laws.

  • 7-2. Maritime project finance and regulatory considerations

  • Investing in maritime projects through tokenized assets introduces various financial and regulatory complexities. Investors must navigate the intricate laws governing international shipping and finance, particularly compliance with regulations concerning anti-money laundering (AML) and know-your-customer (KYC) practices. Furthermore, the maritime industry often faces fluctuating economic conditions and trade policies, which can impact the viability of projects. As of June 2025, attention to these regulatory considerations is crucial for institutions engaging in tokenization, and proactive engagement with regulators can facilitate smoother operations in this evolving landscape.

  • 7-3. Building an ecosystem for secondary offerings

  • To maximize the benefits of tokenization in shipping investments, establishing a robust ecosystem for secondary offerings is vital. This ecosystem may include decentralized platforms where tokens can be traded, resulting in improved liquidity for investors. By enabling secondary sales or swaps, tokenization allows investors to enter or exit positions with greater flexibility, enhancing the attractiveness of shipping investments. Active participation from key stakeholders, such as charterers, shipping companies, and investors, is critical to cultivate this marketplace, that is expected to emerge robustly following the initial launches of tokenized shipping assets.

  • 7-4. Strategic partnerships and growth roadmap

  • In pursuing tokenized shipping investments, forming strategic partnerships will be instrumental in fostering growth. Collaborations with technology providers for blockchain solutions, maritime operational experts, and financial institutions are essential to create a cohesive investment product. As the roadmap unfolds beyond 2025, pivotal milestones can include the development of pilot projects, ensuring efficient compliance mechanisms, and outreach programs aimed at attracting investment. These partnerships will also facilitate knowledge sharing and investment in innovative technologies like AI and IoT, which can further drive efficiencies and enhance the operational capacities of tokenized shipping ventures.

Conclusion

  • The recent regulatory advancements in South Korea present a distinctive opportunity for World Making Members Co. Ltd. to establish a fully compliant IBFC-licensed investment bank and an innovative internet banking operation. By successfully navigating the licensing processes within the Incheon Free Economic Zone and adhering to stringent capital and AML/KYC requirements, the company is positioned to utilize the new Digital Asset Basic Act effectively. This will not only facilitate the issuance of won-pegged stablecoins but also streamline cross-border payment options and enhance service offerings related to cryptocurrency.

  • A pivotal aspect of this strategy is the establishment of robust corporate governance frameworks and investor infrastructures that will cultivate trust within the financial ecosystem. Such measures will be essential in securing confidence from both local and international investors, as well as ensuring compliance with the regulatory landscape as set forth by the Bank of Korea and the Financial Services Commission. Furthermore, the anticipated deployment of a tokenized shipping investment platform holds the potential to unlock advanced liquidity channels, thereby enhancing investment attractiveness in this sector.

  • Looking forward, the continued engagement with regulators and phased implementation of advanced technologies will be critical for maintaining legal soundness and ensuring scalability. As World Making Members Co. Ltd. charts the path towards its operational model, fostering strategic partnerships with key stakeholders will also be vital for facilitating growth, streamlining compliance, and tapping into innovative technological advancements. These efforts position the organization favorably within the burgeoning digital asset landscape, paving the way for future success as South Korea solidifies its position as a global financial hub.

Glossary

  • IBFC: Investment Banking and Financial Companies (IBFC) are specialized entities in South Korea designed to provide a broad range of financial services, including investment banking and asset management. Their regulatory framework is intended to attract foreign investments by simplifying compliance processes and offering competitive transaction policies.
  • Digital Asset Basic Act: Enacted on June 10, 2025, the Digital Asset Basic Act provides a comprehensive legal framework for the regulation of digital assets in South Korea. It facilitates the issuance of local stablecoins and outlines the division of regulatory responsibilities primarily between the Bank of Korea and the Financial Services Commission, aiming to enhance consumer protection and stimulate market participation.
  • Stablecoin: A stablecoin is a type of cryptocurrency that is pegged to a stable asset, such as a fiat currency (e.g., the South Korean won). Its design minimizes volatility, which makes it suitable for transactions and as a store of value, particularly in the context of cross-border payments and digital transactions.
  • CASP: Crypto Asset Service Providers (CASPs) are entities that facilitate activities related to cryptocurrencies, such as trading, custody, and issuance of digital assets. Under the Digital Asset Basic Act, CASPs must comply with stringent licensing requirements to ensure operational transparency and consumer protection.
  • AML/KYC: Anti-Money Laundering (AML) and Know Your Customer (KYC) are regulatory measures aimed at preventing financial crimes such as money laundering and fraud. In the context of digital banking, these practices require institutions to verify the identities of their clients and monitor transactions for suspicious activities to comply with both domestic and international regulations.
  • Incheon Free Economic Zone (IEZ): The Incheon Free Economic Zone is a designated area in South Korea that promotes foreign investment by offering regulatory benefits, such as tax incentives and streamlined licensing for financial institutions. The establishment of IBFCs within this zone aligns with government efforts to enhance the country's position in the global financial market.
  • Tokenization: Tokenization is the process of converting rights or ownership of real-world assets, such as shipping vessels or real estate, into digital tokens on a blockchain. This innovation enhances liquidity and allows for fractional ownership, making investments more accessible to a broader range of investors.
  • Cross-border payments: Cross-border payments refer to transactions that occur between parties located in different countries. The establishment of a well-regulated framework for such payments in South Korea, particularly using won-pegged stablecoins, aims to streamline these transactions, reduce costs, and enhance transaction speed.
  • World Making Members Co. Ltd.: World Making Members Co. Ltd. is a company positioned to benefit from South Korea's evolving digital asset regulatory landscape. It seeks to establish a compliant operation within the financial sector to leverage investment opportunities in digital currencies and tokenized assets.
  • Digital Banking Operations: Digital banking operations involve the provision of financial services via digital platforms, allowing users to manage accounts, conduct transactions, and access banking services online. Under new regulations, these operations must adhere to strict capital requirements and governance frameworks.

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