Korea’s plan to legalize a bank-issued won-denominated stablecoin is running into political resistance, intensifying the long-standing friction between financial regulators, the central bank and the ruling Democratic Party of Korea (DPK) over how and whether to open the market to non-bank players in the country’s first comprehensive digital asset law, market watchers said Thursday. Central to the issue is capital liberalization, where rich people use cash to buy won-denomiated stablecoins and bypass the country’s bank-mediated capital regulations and taxes by diverting their assets overseas. Currently, cash remittances of up to $100,000 are allowed per year without reporting to banks. The Bank of Korea (BOK) has long maintained that across-the-board stablecoin issuance by non-bank issuers would lead to a significant outflow of funds from Korea, undermining the principle of retaining national wealth within the country, a source of rapid economic growth over the past few decades. The Financial Services Commission (FSC), the nation’s financial regulator, together with the ruling pa