Changyong Rhee, Bank of Korea Governor: "Considering allowing stablecoins for non-banking institutions"

According to the industry on the 2nd, Changyong Rhee, the Governor of the Bank of Korea, stated at the '2025 BOK International Conference' held at the Bank of Korea Annex in Jung-gu, Seoul, during a conversation with Christopher Waller, a member of the Board of Governors of the Federal Reserve System (Fed), that the possibility of regulatory arbitrage, among other factors, must be carefully considered before allowing KRW-denominated stablecoins for non-banking sectors.

Governor Rhee said, "We need to think carefully about whether to allow stablecoins denominated in KRW only to banks or also to non-bank institutions," adding, "We must consider financial stability from multiple perspectives." He further explained, "Unlike the United States, our country has capital regulations. Before allowing non-bank institutions to enter the payments business, we need to consider whether (KRW-denominated stablecoins) will move in a direction that circumvents or weakens capital regulations."

He added, "Korea takes a more cautious stance on stablecoins than the United States," and said, "We place a strong emphasis on capital regulations, and other Asian countries feel similarly."

Christopher Waller described stablecoins as "a type of payment tool that non-bank institutions can provide." He said, "The United States has relatively high payment fees, so from the perspective of lowering fees through the private sector, it may be favorable," adding, "Banks may not like it, but if a fair opportunity is provided, it could be acceptable."

That day, there was also discussion about the Central Bank Digital Currency (CBDC) initiative. Waller commented, "Globally, the pace of CBDC-related discussions has slowed down." Regarding Project Agora, which is pursued by the Bank for International Settlements (BIS), Bank of Korea, the central banks of the United States, United Kingdom, Japan, France, Switzerland, Mexico, and the Institute of International Finance (IIF), he evaluated it as "a project to establish an international payment and settlement system platform."

He explained, "Within the payment system, steps such as customer identification (KYC) and anti-money laundering cause remittances to take a long time and incur costs, so the goal is to create a unified platform to integrate these."

Meanwhile, in his keynote speech, Waller described the inflation increase caused by US tariffs as temporary. He said, "Although the tariff level is uncertain, we currently estimate the effective tariff rate at about 15%," but emphasized, "The effects of tariffs will be most evident in the second half of the year, though the impact on inflation will be temporary."

He continued, "Some are concerned that the surge in inflation after COVID-19 in 2021–2022 lasted longer than expected, but at that time there were factors such as labor supply shocks, supply chain disruptions, and fiscal policies for economic stimulus," adding, "Currently, these three factors are absent regarding tariffs."

He also said, "If the effective tariff rate drops to the low-tariff scenario, and core inflation converges toward the 2% target while the labor market remains solid, then we would support a rate cut in the later part of this year as a result of 'good news'."