Governor Chang Yong Rhee: "Korean Won Stablecoin should be issued by banks first… Currency is the BOK's core business"

Governor Chang Yong Rhee of the Bank of Korea expressed that he is not fundamentally opposed to a Korean Won-based stablecoin and emphasized the need for issuance centered on banks, along with supervision by the central bank.

According to the industry on the 29th, Governor Rhee stated at a press conference following the Monetary Policy Committee meeting, where the base interest rate was lowered by 0.25% point, that "I think there is also a need for the BOK to actively create stablecoins."

Governor Rhee pointed out that if non-bank institutions take the lead in issuing stablecoins, there could be issues with financial stability. He said, "Since Korean Won Stablecoins are substitutes for currency, if non-bank institutions issue them at will, it can significantly impair the effectiveness of monetary policy," and added, "If these currency substitutes default or encounter problems, trust in the payment and settlement system could be undermined all at once."

He also explained, "Korean Won-based stablecoins can be easily traded with Dollar-based stablecoins and could be used as a means to circumvent capital regulations," adding, "Issuance should start with banks, which can be supervised."

Governor Rhee stated "Korean Won Stablecoins are essentially currency," and "Currency is the core business of the Bank of Korea, and leaving its determination to other institutions carries too much risk."

Regarding 'Project Han River,' a domestic CBDC test led by the Bank of Korea, Governor Rhee commented, "The deposit token in Project Han River is a Korean Won Stablecoin issued on the BOK network," stating the intention to develop it further over time.

Meanwhile, Project Han River is an initiative that converts commercial bank deposits into Central Bank Digital Currency (CBDC)-linked tokens for real-life payments.