The Bank of Korea is intensifying its push for commercial banks to spearhead the issuance of Korean won-pegged stablecoins. The central bank has alerted policymakers to potential risks posed by privately issued digital tokens, including diminished monetary policy control and threats to foreign-exchange and financial stability.
A recent report to South Korea's National Assembly Strategy and Finance Committee categorized won stablecoins as "currency-like substitutes." The Bank of Korea emphasized that their rollout must consider monetary policy, foreign exchange stability, and financial risks, not solely industrial profits.
The bank reiterated concerns that non-bank entities issuing stablecoins could circumvent foreign exchange regulations and potentially blur the lines between banking and commerce, a principle central to Korea's financial framework. It advocates for banks, which are already subject to stringent capital, governance, and compliance standards, to be the primary issuers, with any expansion beyond banks proceeding cautiously after thorough risk assessments.
This stance comes as policymakers grapple with a stalled stablecoin framework, particularly regarding who should be eligible to issue won-pegged tokens and the extent of bank involvement.