Kim Gap-rae: "Stablecoin issuers should be regarded as financial institutions"

Uk Jin

Summary

"Director Kim Gap-rae of the Korea Capital Market Institute stated that the issuer of a Korean won stablecoin should be treated as a financial institution."
"Director Kim emphasized that, like in the United States and EU, a system of differentiated regulation for issuers based on issuance scale should be considered."
"He presented anti-money laundering (AML), maintenance of reserve assets, and repayment obligations as essential provisions for stablecoin legislation."

Director Kim Gap-rae of the Korea Capital Market Institute speaks at the policy forum on "Integrating Stablecoins into the Institutional System," held at the Korea Financial Investment Association in Yeouido on the 23rd. /Photo=Jinwook, BloomingBit

Amid the accelerating legislative process for the Korean won stablecoin (a virtual asset pegged to the value of fiat currency) in the domestic market, a proposal was made to impose regulations on issuers equal to those applied to financial institutions.

At the policy forum on "Integrating Stablecoins into the Institutional System," held at the Korea Financial Investment Association in Yeouido, Seoul, on the 23rd (KST), Director Kim Gap-rae of the Korea Capital Market Institute asserted, "Once issuance of the Korean won stablecoin begins, issuers become financial institutions." He added, "Therefore, instead of only imposing requirements such as minimum capital, functional regulations should be implemented for issuers."

Director Kim stated that reference should be made to cases in the United States and the European Union (EU) for stablecoin legislation. He explained, "In the United States and EU, issuers are subject to differentiated regulations based on issuance scale," and emphasized, "A similar method should be considered for regulating Korean won stablecoin issuers."

He also highlighted the following essential items for stablecoin legislation: ▲Anti-money laundering (AML) obligations for issuers, ▲Requirement to maintain reserve assets, and ▲Repayment obligations.