Bank of Korea reiterates concerns over 'Korean won stablecoin'… "It should be issued by banks"

The monetary authority once again emphasized its previous stance that the Korean won stablecoin should be issued within the banking sector.

Goh Kyung-chul, head of the Electronic Banking Team at the Bank of Korea, attended the seminar titled 'Korean Won Stablecoin: The Opening of the Digital Won Era' held at the National Assembly Members' Office Building in Seoul on the 18th. He remarked, "When issuing a Korean won stablecoin, there may be problems such as circumventing existing capital regulations and conflicts with the principle of separating banking and commerce," and added, "Stablecoins should be issued in the form of a consortium led by banks." Goh further stated, "To establish stablecoins as a reliable means of payment, trustworthiness is essential," and noted, "Banks, with their wealth of experience and know-how, can take responsibility and build that trust."

He also mentioned the possibility of fintech companies participating. Goh said, "(The banking sector) should first build up trust and then cooperate with fintech companies by leveraging their technology and business models to pursue certainty," and further emphasized, "(However,) if non-financial companies enter the financial sector with stablecoins, careful consideration is needed as this could lead to confusion in their existing business operations."

He also stressed the need to regulate dollar-based stablecoins such as Tether (USDT). Goh commented, "Dollar stablecoins are already listed on domestic exchanges, they are actively traded, and their inflow and outflow have reached significant levels," but added, "Since dollar stablecoins are not covered by domestic regulatory frameworks such as the Foreign Exchange Transaction Act, it is difficult to accurately grasp their status." He further noted, "Establishing regulatory measures for currently circulating dollar stablecoins is a very urgent matter."

Central bank digital currency (CBDC) was also mentioned. Goh stated, "The deposit tokens promoted by the Bank of Korea are also considered a viable alternative to digital assets," and continued, "(Alongside stablecoins,) I hope these can coexist, compete, and function together as digital payment instruments."