Bank of Korea: Stablecoins should be issued mainly by the banking sector…policy body also needed

The Bank of Korea has reiterated its longstanding stance that issuers of won-denominated stablecoins should be limited primarily to the banking sector.

On the 18th, in a written response to Rep. Cha Gyu-geun of the Rebuilding Korea Party, a member of the National Assembly’s Planning and Finance Committee, the BOK said, “(Won stablecoins) should begin issuance centered on a banking-sector consortium.” It added, “If issuance is expanded to non-financial companies after confirming safety (under a banking-led approach), risks related to won stablecoin issuance will be minimized.”

Regarding a recent incident in which domestic crypto exchange Bithumb mistakenly credited Bitcoin (BTC), the BOK replied that “similar accidents could occur even with the introduction of won stablecoins.” As a comparable case, it cited an incident in October last year in which Paxos, the issuer of PayPal’s stablecoin (PYUSD), accidentally issued as many as 300 trillion tokens due to a technical error and then burned them 22 minutes later.

The BOK stressed that “stablecoins combine technology, finance, foreign exchange and payment infrastructure, which can create systemic risk.” It also argued that “to ensure close coordination among monetary, foreign-exchange and financial authorities, it is desirable to establish and operate a policy consultative body among relevant ministries.” The BOK has proposed that Korea also set up a body similar to the “Stablecoin Certification Review Committee (SCRC)” stipulated in the U.S. GENIUS Act (Stablecoin Act) to independently review and certify new won stablecoins.