South Korea

“마통 5조원 긁어 어디 썼길래”…정부, 아직 국방비도 지급 안했다

Maekyung | Local Language | News | Jan. 9, 2026 | Political Scandal or Corruption

In December 2025, the South Korean government borrowed 5 trillion won from the Bank of Korea due to a temporary cash shortage, following a similar borrowing of 14 trillion won in September 2025. These loans are part of a temporary loan system where the government borrows short-term funds to cover timing gaps between revenues and expenditures, akin to an overdraft account at a commercial bank.

In total, the government borrowed a cumulative 164.5 trillion won from the Bank of Korea in 2025, the second-largest amount on record after 2024’s 173 trillion won. This figure notably exceeds borrowings from 2021 through 2023 combined. The government paid interest on these loans totaling 158.09 billion won in 2025, also the second-highest record after 2024.

Despite these emergency funds, the government reportedly failed to make timely payments of approximately 1.3 trillion won in defense funds to military services and contractors by the end of last year. The Ministry of Economy and Finance committed to executing these delayed expenditures promptly within the first week of January 2026.

Criticism was leveled at the Lee Jae-myung administration for heavy reliance on Bank of Korea overdrafts while simultaneously failing to pay urgent defense budget items on time. Lawmaker Park Seong-hoon condemned this as a significant treasury management failure, particularly given the administration's earlier opposition to temporary borrowing practices when out of power.

Yonhap | English | News | Jan. 9, 2026 | Regulation

The Ministry of Trade, Industry and Resources in South Korea held a meeting with the steel industry on January 8 to discuss response measures to the European Union's Carbon Border Adjustment Mechanism (CBAM), which began on January 1. The CBAM imposes taxes on carbon-intensive goods imported into the EU, including steel, aluminum, cement, and fertilizers, with plans to expand these levies to items like auto parts, refrigerators, and washing machines starting in 2028.

South Korea's major steelmakers have developed preliminary strategies to ensure compliance with the CBAM, including obtaining carbon emission verification from domestic institutions recognized by the EU. However, they requested ongoing government support to mitigate uncertainties as the EU's carbon tax policy is expected to evolve.

The Ministry highlighted its intent to continue consultations with the EU throughout the year to address potential revisions to the CBAM and protect the interests of Korean industries. Lee Jae-keun, the ministry's director general for new trade strategy and policy, emphasized the importance of using this dialogue to respond effectively to the changing regulatory landscape.

이재명 ”5000 코스피"…한은·금융위, 스테이블코인·STO 규제 마련 올스톱

ZD Net Korea | Local Language | News | Jan. 9, 2026 | Regulation

The KOSPI index recently reached 4,600 and showed an upward trend, leading to delays in legislation related to stablecoins. Questions have arisen about the Lee Jae-myung administration's ability to provide alternative investment options beyond stocks, especially with its pledge to reach a KOSPI index of 5,000. Authorities appear to be aiming to prevent investment flows away from stocks as the index rises.

Regulatory preparations for token securities (STOs) and stablecoins have been postponed. Financial Services Commission chairman Lee Eok-won initially intended to amend the Capital Markets Act to address STOs but has made little progress despite market milestones. The Bank of Korea and the Financial Services Commission created a "Digital Assets Act Key Issues Coordination Plan" for stablecoins, covering issuer requirements, agency cooperation, capital requirements, governance of virtual asset exchanges, and liability for incidents like exchange hacks.

Disagreements between the Bank of Korea and the Financial Services Commission persist, particularly regarding issuer conditions and a coordinating agency body, preventing consensus. The unresolved issues were brought before the National Assembly's Political Affairs Committee despite ongoing discussions. While both institutions deny political motives, some speculate the ruling party prioritizes stock market revival over stablecoin regulation ahead of local elections. The Bank of Korea stated it agreed to submit the coordination plan to the National Assembly but expressed surprise at the current version, indicating communication gaps with the Financial Services Commission.