State Affairs Planning Advisory Committee receives report on 'Korean won stablecoin regulatory measures'

The State Affairs Planning Advisory Committee, which serves as the transition team for the Lee Jae-myung administration, has reportedly received a briefing from the Financial Supervisory Service regarding regulatory measures for stablecoins.

According to the industry on the 25th (local time), the Financial Supervisory Service reported to the State Affairs Planning Advisory Committee the possible financial market risks associated with issuing (Korean won) stablecoins, presenting different scenarios during a business briefing held the previous day.

In particular, the Financial Supervisory Service stated that if Korean won stablecoins are issued, measures for managing 'seigniorage' are necessary. Seigniorage refers to the profit that a central bank earns when issuing currency. The explanation continued that when private companies issue stablecoins, they could earn similar profits, so public management measures are required.

The volatility risk of stablecoins was also mentioned. The Financial Supervisory Service warned that if confidence in the value stability or the reserve assets of stablecoins is shaken, a type of 'bank run' could occur, impacting the entire financial market. Furthermore, the institution pointed out the potential occurrence of exchange rate risks due to the unregulated influx of dollar-based stablecoins.