Bank of Korea Governor Rhee Chang-yong: “Concerns over capital outflows from won stablecoins persist… a bank-centric structure is desirable”

Bank of Korea (BOK) Governor Rhee Chang-yong said concerns over capital outflows would still remain if won-denominated stablecoins (digital assets pegged in value to fiat currencies) are issued.

According to local media outlets including Aastocks on the 27th (Korea time), Rhee, who attended the 19th Asian Financial Forum in Hong Kong on the 26th (local time), said, “If won stablecoins are actively exchanged with dollar stablecoins, they could be used as a means to circumvent controls on capital inflows and outflows,” adding, “If market expectations are shaped by exchange-rate fluctuations, there is a possibility that funds could shift on a large scale into dollar stablecoins.”

He went on to argue that issuance should be centered on major banks. “Dollar stablecoins have broad use cases and high accessibility, and transaction costs are lower than using dollars directly,” Rhee said. “This can lead to large-scale cash movements, and a structure in which non-bank institutions issue stablecoins makes supervision even more difficult. Therefore, while we would allow the issuance of won stablecoins, we want to start with bank-led institutions.”

Rhee added, “Korea’s financial authorities are reviewing measures to allow domestic institutions to issue virtual assets by establishing a new registration regime,” and said, “Won stablecoins are highly likely to be used mainly for cross-border transactions, while tokenized deposits would be more suitable for domestic payments and settlement.”