Democratic Party Visits Upbit... "Stablecoins Must Be Addressed from a Monetary Sovereignty Perspective"

Democratic Party 'Digital Asset Field Meeting'

Attended by 5 Major Virtual Asset Exchanges

"Stablecoins, Significant Economic Change"

"Great Impact on Monetary and Foreign Exchange Policies"

The Democratic Party of Korea met with the top 5 domestic virtual asset exchanges and stated that "stablecoins must be addressed from the perspective of monetary sovereignty." With the early presidential election about a week away, the Democratic Party is accelerating its pro-virtual asset stance.

Democratic Party lawmaker Ahn Do-geol said at the Democratic Party's Economic Growth Committee 'Digital Asset Industry Field Policy Meeting' held at the Upbit Lounge in Gangnam-gu, Seoul on the 27th, "Stablecoins are already functioning as a means of payment and digital currency," and "(Stablecoins) must be addressed from the perspective of monetary sovereignty."

The meeting was attended by Lee Seok-woo, CEO of Dunamu, Lee Jae-won, CEO of Bithumb, Oh Se-jin, CEO of Korbit, and all five major domestic virtual asset exchanges. Rep. Ahn stated, "The fact that stablecoins have become a means of payment means they have acquired the meaning of currency," and "(Stablecoins) are a significant and extensive economic change that is intertwined with domestic monetary policy as well as foreign exchange policy."

"Many Policy Challenges for Stablecoins"

Future challenges were also mentioned. Rep. Ahn said, "Due to convenience, (stablecoins) will continue to spread," and "Advanced countries like the United States are already rushing to legislate and reform systems based on a change in perspective." He added, "The impact of (stablecoins) on domestic monetary and foreign exchange policies is very significant," and "There are many challenges in how to view and control (stablecoins) within the policy framework."

There was also a suggestion that the foreign exchange asset status of stablecoins should be specifically defined in the institutionalization process. Hwang Se-woon, a senior research fellow at the Korea Capital Market Institute, said at the meeting, "When designing foreign exchange-related regulations for stablecoins, capital inflow and outflow control, exchange rate stability, monetary sovereignty guarantee, and international standard harmonization should be considered," and "It should be clarified whether stablecoins are regarded as foreign currency-denominated assets under the Foreign Exchange Transactions Act."

"Authorities Should Introduce Monitoring System"

There was also a call for the government to monitor the impact of dollar-based stablecoins on exchange rates. Researcher Hwang said, "The large inflow and outflow of foreign currency-based stablecoins can affect exchange rate volatility and the composition of foreign exchange reserves," and "It is necessary for foreign exchange authorities to introduce a system to monitor the holdings, circulation, and conversion value of stablecoins."

There is also a view that Korea should develop a virtual asset index. Kang Hyung-gu, a professor at Hanyang University and former president of the Korea Financial Management Association, said, "Currently, there are exchange-traded funds (ETFs) targeting single assets like Bitcoin (BTC) in the virtual asset market, but there are hardly any index-based ETFs, which are the most important," and "If Korea develops a K-Crypto index and creates ETFs based on that index, it could become a global standard."