"KRW Stablecoin, Only Banks Can Issue?"... Political Circles and Industry Push Back Against Bank of Korea’s Monopoly

Doohyun Hwang

Summary

Rhee Chang Yong, Governor of the Bank of Korea, emphasized that the issuance of KRW stablecoins should be restricted to banks.
Political circles and the industry expressed concerns that a central bank-centric structure is inconsistent with global trends and warned that a lack of private participation could undermine innovation and competitiveness.
As the U.S. case demonstrates, institutionalizing private participation can drive rapid financial innovation, and investors need to closely monitor regulatory trends and changes.

Rhee Chang Yong: "Stablecoins Should Only Be Issued by Banks"

Democratic Party: "Private Participation is Essential" Backlash

Industry Voices Concern Over "Exclusion from the Global Market"

U.S. 'GENIUS Act' Moves to Institutionalize Private Participation

As Rhee Chang Yong, Governor of the Bank of Korea, once again emphasized the Bank’s control over the issuance of KRW stablecoins, political circles and the digital asset industry reacted immediately. There is growing concern that if Korea sticks to a centralized approach for stablecoins, it could lose its competitiveness and innovative edge.

At a press briefing following the Monetary Policy Board meeting on the 29th, Governor Rhee stated, "KRW stablecoins are, in effect, a form of currency, which falls squarely under the Bank of Korea’s mandate." He maintained that the authority to issue KRW stablecoins should not be handed over to other institutions. Rhee argued, "If non-bank institutions are allowed to freely issue KRW stablecoins, it could undermine the effectiveness of monetary policy and erode trust in the payment and settlement system," and that issuance should begin with banks where regulatory oversight is possible.

Political circles criticized this stance, arguing that the Bank of Korea’s perspective is out of step with global trends. On the 30th, the Democratic Party of Korea’s Digital Asset Committee issued a statement saying, "Dollar-based stablecoins are rapidly dominating global payment networks and encroaching on the Korean market," and that "a central bank-centric system of licensing and supervision may not align with international regulations and technical trends." The committee also warned that, considering creative uses such as K-culture products, private participation in KRW stablecoin issuance is essential, and a banking monopoly could result in slower implementation and failure to build a robust ecosystem.

Industry experts also voiced their concerns. Bok Jin-sol, a researcher at Populous, told BloomingBit, "While the Bank of Korea’s position is understandable, it is heavily underpinned by a conservative approach to oversight and management. A bank-centric structure is merely an extension of the existing deposit system and fails to fully leverage the unique advantages of stablecoins."

Researcher Bok stressed, "If Korea insists on a central bank-centric licensing and supervision regime, it may be marginalized in the next-generation financial market due to regulatory gaps and limited use cases relative to global standards." She added, "Before dollarization (the phenomenon of using US dollars instead of local currency) becomes entrenched, private companies should be allowed to issue KRW stablecoins, and the ecosystem must be developed quickly."

In fact, the United States is being hailed for swiftly leading financial innovation by institutionalizing private participation through its stablecoin regulatory bill, the GENIUS Act. The bill allows non-bank institutions under state supervision to issue stablecoins if certain requirements are met, provided they demonstrate similar regulatory standards as the federal level. Foreign issuers are only exceptionally permitted if their home countries maintain regulatory regimes equivalent to that of the U.S.

Jung Su-hyun, senior researcher at Shinhan Investment Corp., agreed in part with Governor Rhee while suggesting a more flexible approach. Jung noted, "In the early stages, it would be advantageous for financial institutions with built-in anti-money laundering (AML) systems to be the main issuers to ensure the system settles smoothly." He explained, "The issuer need not be limited to banks—various financial institutions under regulatory oversight, such as securities firms, can also be considered. The key is how to design a trustworthy structure, not simply who the issuer is."

He added, "If the stablecoin is structured like USD Coin (USDC) issued by Circle, backed by highly liquid assets or government bonds, it would be beneficial to create a system so that even non-financial institutions could become issuers."