BOK Urges National Assembly to Strengthen Regulations on US Dollar Stablecoins

The Bank of Korea has reportedly urged the National Assembly to strengthen regulations concerning US dollar stablecoins.

According to the industry on the 20th, the Bank of Korea submitted a written response to Seong-Hoon Park from the People Power Party, stating, "Currently, as dollar stablecoins are being circulated in the domestic market, the side effects such as evasion of foreign exchange regulations are increasing," and "It is necessary for the government and the National Assembly to discuss amendments to the Foreign Exchange Transaction Act and related laws."

Through the written statement, the BOK expressed concerns that △ currency substitution due to the proliferation of dollar stablecoins △ increased instability in the foreign exchange market due to dollar outflows △ weakening of currency validity △ and weakening of monetary sovereignty could have negative impacts.

It also expressed a negative stance on the introduction of a Korean won stablecoin. The BOK explained, "If a won stablecoin is introduced, its scale is likely to exceed last year's prepaid recharge funds (about ₩3.95 trillion). In the event of a sell-off, losses could be greater than the failure settlement amount of ₩1.3 trillion for prepaid recharge funds."

Furthermore, the Bank reiterated its previous position emphasizing that issuance of won stablecoins should be centered on banks, while also leaving room for collaboration with non-bank institutions.