"Separate Management of Stablecoin Issuance and Distribution from Virtual Assets"

Korea Economic Daily

Summary

Jeong-Doo Lee, Senior Research Fellow at the Korea Institute of Finance, argued that the issuance and distribution of stablecoins should be managed separately from other virtual assets like Bitcoin.
He emphasized the need to supplement the monitoring system as stablecoins issued overseas can expose domestic users to issuer bankruptcy risks.
He stated that joint efforts are needed at the level of global Anti-Money Laundering and Countering the Financing of Terrorism systems to check for loopholes in foreign exchange management and prevent regulatory gaps.

Korea Institute of Finance Suggestion

There has been a suggestion that the issuance and distribution of stablecoins, which are pegged 1:1 to fiat currency, should be managed separately from virtual assets like Bitcoin.

Jeong-Doo Lee, Senior Research Fellow at the Korea Institute of Finance, stated this at the 'Capital Market Activation and Financial Stability' conference held on the 13th at the Bank Hall in Myeong-dong, Seoul, hosted by the Korean Economic Association, the Korea Institute of Finance, and the Capital Market Research Institute. He mentioned, "As the issuance and distribution scale of stablecoins grows, the need for institutional supplementation is also increasing."

The Senior Research Fellow said, "Stablecoins issued overseas without a domestic legal enforcement link to the issuer can leave domestic users vulnerable to issuer bankruptcy risks," and emphasized, "It is urgent to supplement the monitoring system to prevent illegal transactions."

He added, "This is not limited to the domestic scope, and joint efforts are needed at the level of the global Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) systems," and "Regarding the domestic distribution of stablecoins pegged to foreign currencies like the dollar, we need to check for loopholes in foreign exchange management and actively discuss to prevent regulatory gaps."

Reporter Jin-Sung Kim jskim1028@hankyung.com