Government to assess stablecoins' impact amid soaring won–dollar exchange rate

As the won–dollar exchange rate has stabilized in the high-1,400 won range, the government will conduct an urgent review to determine whether dollar-denominated stablecoins are amplifying volatility in the foreign exchange market.

According to relevant ministries on the 28th, Deputy Prime Minister and Minister of Economy and Finance Koo Yoon-cheol will hold the first meeting of the 'International Financial Policy Advisory Committee' on December 1 to discuss foreign exchange market conditions and the impact of stablecoins. The committee will include 10 figures from academia, research institutes, and the financial sector, and will operate as a private advisory body directly under the Deputy Prime Minister.

This is the first time the Ministry of Economy and Finance has placed stablecoins on the official agenda. Recent market assessments suggested that the expanded use of dollar-denominated stablecoins for payments could weaken demand for the won and increase upward pressure on the exchange rate. Some studies even presented analyses that, if stablecoin issuance surges, the won–dollar exchange rate could rise by as much as 10%.

The fact that the United States completed legislation for dollar stablecoins (the 'Genius Act') last July is also a factor. Because the law requires holding dollars and U.S. Treasuries equal to issuance amounts, an increase in issuance could immediately translate into greater dollar demand and affect South Korea's foreign exchange market, raising concerns.