The Bank of Korea (BOK) has expressed concerns about the potential impacts of issuing won-backed stablecoins on the country's financial system.
Background on Stablecoin Issuance
BOK Governor Lee Chang-yong stated during a press briefing that issuing won stablecoins may not decrease the use of dollar stablecoins but could rather facilitate the exchange between them. 'This may increase the demand for dollar stablecoins,' Lee said.
Discrepancy Between Bank and Presidential Views
The remarks from the BOK chief appear to conflict with the new South Korean President Lee Jae Myung’s pro-stablecoin agenda, which advocates for the promotion of KRW-backed stablecoins as a tool to prevent capital flight and support sovereign control in a digitized financial future.
Risks and Precautions
Lee Chang-yong emphasized the importance of robust risk controls and regulatory measures to avoid unintended macroeconomic consequences, reaffirming that while the central bank does not oppose the issuance of won stablecoins, it must be approached cautiously with appropriate safeguards in place.
The diverging opinions between the central bank and the executive branch highlight the necessity of a balanced approach towards digital currency innovation and maintaining financial stability.
