FKI "Digital Asset Legislation Needed... Cautious Introduction of Dollar-Based Stablecoins"

Amid growing interest in digital assets, including stablecoins (virtual assets linked to the value of fiat currency), in South Korea, there is an opinion that the introduction of 'dollar-based stablecoins' should be carefully considered.

According to the industry on the 19th, the Federation of Korean Industries (FKI) held a 'Digital Asset Expert Panel Meeting' at the FKI Tower Conference Center in Yeouido, Seoul, and discussed related issues.

Jeong Cheol, Head of Research at FKI and President of the Korea Economic Research Institute, said, "The change in the U.S. digital asset policy in the Trump 2.0 era signifies a fundamental restructuring of the financial paradigm," adding, "If digital assets penetrate the market widely, Korea will face new changes and challenges in transitioning to a digital financial system."

First, there was a claim that the second phase of digital asset legislation is urgent. Lawyer Kim Hyo-bong from Pacific said, "The U.S. is likely to complete the institutional arrangements related to digital assets this year, and the EU is already implementing the Markets in Crypto-Assets (MiCA) regulation," adding, "Korea should also expedite the second phase of legislation in line with global trends." He continued, "Considering the current global regulatory status, the policy of separating finance and virtual asset industries needs to be reconsidered," and argued, "A market-friendly approach is needed, such as allowing general corporations and foreigners to participate in the digital asset market and easing the one-exchange-one-bank system."

There was also a discussion on stablecoins that day. In particular, there was a claim that the introduction of dollar-based stablecoins should be carefully considered. Lee Seung-seok, a senior researcher at the Korea Economic Research Institute, said, "If dollar-based stablecoins establish themselves as a means of payment in Korea, it could cause structural changes in the won/dollar exchange rate mechanism," adding, "The exchange rate could soar due to decreased domestic currency demand and increased foreign currency demand." He continued, "The rapid capital mobility and decentralized structure of dollar-based stablecoins could promote large-scale capital outflows in times of crisis," adding, "The crisis could unfold in a different pattern from past financial and foreign exchange crises."