Bank of Korea deputy governor Ryoo Sangdai reportedly wants banks to be the primary issuers of stablecoins in the country before gradually expanding to other sectors.
Yonhap News reported that during a Tuesday press conference, Ryoo said a won-denominated stablecoin should first be introduced at regulated commercial banks to ensure a safety net.
“It would be desirable to initially allow stablecoin issuance primarily through banks, which are subject to higher levels of financial regulation, and gradually expand it to the non-banking sector,” he said.
“The aim is to establish a safety net, considering the potential for market disruption or consumer harm.”
BOK still concerned about stablecoins
However, the central bank still has some concerns about stablecoins. Ryoo said a stablecoin rollout could accelerate capital outflows and “shift the fundamental stance we have maintained on foreign exchange liberalization, and the internationalization of the Korean won.”
“We also need to consider the implications for financial sector restructuring, including the potential introduction of narrow banking,” he added.
Bank of Korea governor Rhee Chang-yong said at a press conference on June 18 that he didn’t oppose a won-based stablecoin but was still concerned about managing the foreign exchange of the token.
On June 10, newly elected president Lee Jae-myung’s ruling Democratic Party put forward the Digital Asset Basic Act, which would allow companies with a minimum equity capital of $368,000 to issue stablecoins.
CBDCs a counter to stablecoins
Chosun Daily reported that Ryoo said during the same press conference that the central bank would continue to move forward with a central bank digital currency as a “countermeasure to stablecoins.”
On March 24, government agencies, including the BOK, the Financial Services Commission and the Financial Supervisory Service, announced a CBDC test that will conclude on June 30.
Related: Kaia pledges won-pegged stablecoin as South Korean payment stocks rally
“However, since the government’s position on stablecoins is not clearly established and there is significant uncertainty regarding related laws and policies, the timing for operating the second pilot test will be determined through consultation with banks,” Ryoo said.
Stablecoins rolling out globally
South Korea isn’t the only country considering stablecoin options. On June 19, Bloomberg reported that credit card giant Visa partnered with Yellow Card Financial, an African stablecoin payments provider, to accelerate adoption across the continent.
A Russian finance ministry official also floated a plan for the government to develop its own stablecoin in April. A trio of major Abu Dhabi institutions teamed up to create a new dirham-pegged stablecoin in the same month.
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