Will Fallout From Bithumb Overpayment Incident Spread? Bank of Korea May Play Card of Granting Banks a Monopoly on KRW Stablecoins

▲ Bithumb, Bitcoin (BTC), Virtual Assets/ChatGPT-generated image ©

The Bank of Korea has issued a strong warning following Bithumb’s recent accidental Bitcoin (BTC) mispayment incident, urging that internal control requirements be significantly strengthened in the enactment of the Digital Asset Basic Act and formally stating that the issuance of won-denominated stablecoins should be limited to the banking sector.

According to the National Assembly and the Bank of Korea on the 18th, the central bank, in a written response to an inquiry from Rep. Cha Gyu-geun of the Rebuilding Korea Party, identified the absence of internal control mechanisms capable of preventing human error in advance as the core cause of the Bithumb incident. It is highly unusual for the Bank of Korea to comment so specifically on an individual financial accident, a move interpreted as underscoring the importance of financial stability ahead of the second phase of digital asset legislation.

The Bank stressed that beyond simple human error, it is urgent to establish dual verification systems and IT infrastructures capable of detecting and controlling such mistakes. In particular, it identified the possibility that a similar incident could be repeated during the introduction of won-based stablecoins as the most significant threat.

As evidence, the Bank cited a case from last October in which Paxos, the issuer of PayPal’s stablecoin (PYUSD), mistakenly issued an astonishing 300 trillion coins due to a technical error before burning them within 22 minutes. It warned of the critical risk that if stablecoins—designed as substitutes for currency—are massively overissued, the credibility of the national currency could collapse and the effectiveness of monetary policy could suffer severe damage.

Accordingly, the Bank of Korea stated that issuance authority for won-based stablecoins should not be indiscriminately granted to non-banking entities and that risks can be minimized by first verifying safety through a banking sector consortium before gradually expanding participation. It also proposed the establishment of an independent body to review new coin issuances, similar to the Stablecoin Certification Review Committee (SCRC) specified in the U.S. GENIUS Act, along with the operation of a policy consultative body among related government ministries.

The aftermath of the Bithumb incident appears likely to lead to stronger market control by regulators. In addition to the Bank of Korea’s firm stance, the industry is closely watching how the incident may affect ongoing discussions in the National Assembly and among authorities to limit major shareholders’ ownership stakes in virtual asset exchanges to between 15 and 20 percent.

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