The Bank of Korea argued that if the issuance of stablecoins based on the won is allowed, the monetary authority must manage it from the licensing stage. With discussions on virtual asset legislation becoming active ahead of the presidential election, this appears to be a movement to clearly define regulatory authority.
According to the Bank of Korea on the 12th, Go Kyung-cheol, head of the electronic finance team at the Bank of Korea, mentioned this while presenting on the topic of "trends and future tasks related to stablecoins" at the Korea Financial Law Association academic conference held on the 9th at the Bank of Korea's annex.
Currently, stablecoins based on the U.S. dollar, such as USDT (Tether), are being used in overseas remittances and payment sectors instead of the dollar. In contrast, stablecoins based on the won are not yet permitted to be issued domestically under current law.
Go noted, "Stablecoins have a significant impact on the implementation of Central Bank policies, including monetary policy, financial stability, and payment systems," adding, "There is a need to grant the Central Bank substantial legal authority at the licensing stage concerning entry regulations for issuers."
He continued, "The Central Bank must minimize the negative impact on policy implementation by effectively intervening at the licensing stage," and stated, "It is desirable to build a future ecosystem that encompasses the Central Bank Digital Currency (CBDC) being pursued by the Bank of Korea, deposit tokens based on it, and stablecoins."
This announcement reflects a step further from the Bank of Korea's previous position. In a payment report last month, the Bank of Korea pointed out that stablecoins could act as factors that undermine currency sovereignty and the effectiveness of monetary policy, noting that "very careful consideration is necessary when preparing for introduction and regulatory measures."
Meanwhile, the issue of whether to allow stablecoins based on the won has emerged as a key point ahead of the presidential election. Lee Jae-myung, the Democratic Party of Korea's presidential candidate, mentioned during discussions with economic YouTubers on the 8th that "we need to create a won-based stablecoin market to prevent outflow of national wealth."
There are also signs of a logical dispute among agencies over regulatory authority. Min Byung-deok, a Democratic Party lawmaker, specified in the draft of the Digital Asset Basic Act No. 1 published on the 24th of last month that the Financial Services Commission, not the Bank of Korea, should hold the authority to approve the issuance of stablecoins.