Bank of Korea (BOK) Deputy Governor Ryoo Sangdai has advocated for a phased approach to stablecoin adoption, prioritizing issuance by regulated commercial banks before broader expansion.
Initial Rollout Strategy
Speaking at a press conference on Tuesday, Ryoo suggested starting with a domestically-issued stablecoin at regulated commercial banks to establish a robust safety net. “It would be desirable to initially allow stablecoin issuance primarily through banks, which are subject to higher levels of financial regulation,” he stated.
“The aim is to establish a safety net, considering the potential for market disruption or consumer harm.”
The governor acknowledged concerns regarding market stability and consumer protection.
Central Bank Concerns
Despite openness to the concept, the BOK remains wary, citing potential negative implications. Ryoo warned that widespread stablecoin adoption could exacerbate capital outflows and alter Korea’s stance on foreign exchange liberalization and won internationalization.
Ryoo also mentioned considering implications for financial sector restructuring, including the possibility of narrow banking.
Separately, BOK Governor Rhee Chang-yong expressed reservations, noting ongoing concerns about managing the foreign exchange aspect of any stablecoin.
Countermeasures: CBDC Development
Ryoo emphasized that the central bank would proceed with developing a Central Bank Digital Currency (CBDC) as a “countermeasure to stablecoins.” Agencies including the BOK, Financial Services Commission, and Financial Supervisory Service are conducting a CBDC pilot test set to end on June 30th.
“The timing for further pilot tests will depend on discussions with banks,” Ryoo noted, reflecting cautious timing given the lack of a fully established government position on stablecoins.
Global Stablecoin Landscape
Elsewhere, stablecoin deployment is advancing. Visa partnered with an African provider to accelerate adoption, while Abu Dhabi financial institutions launched a dirham-pegged stablecoin. A Russian official also floated national stablecoin plans.
Korea’s consideration comes alongside the June 10 passage of a Digital Asset Basic Act allowing companies meeting certain capital requirements to issue stablecoins.
Related: Kaia pledges won-pegged stablecoin as South Korean payment stocks rally
Magazine: Ridiculous ‘Chinese Mint’ crypto scam, Japan dives into stablecoins: Asia Express
