Stablecoin Issuance Should Begin With Banks, Says BOK Official
South Korea's Bank of Korea suggests allowing banks to issue stablecoins before expanding permissions to non-banking sectors. This recommendation comes amid a surge in digital asset trading, with transactions increasing from $12.9 billion in Q3 2024 to $42.4 billion in Q1 2025. Nearly half of the digital assets transferred abroad in Q1 2025 were stablecoins, raising concerns about capital outflows and monetary sovereignty. Deputy Governor Ryoo Sang-dai emphasized the need for a safety net to prevent market disruption and consumer harm. Governor Rhee Chang-yong supports stablecoin issuance but stresses careful examination of its effects on foreign exchange management. President Lee Jae-myung's administration prioritizes stablecoin regulation, proposing the Digital Asset Basic Act to enable domestic companies to issue won-backed stablecoins. The Bank of Korea is also considering a hybrid model for deposit tokens alongside private-sector stablecoins. Some experts express skepticism about the effectiveness of this approach in protecting monetary sovereignty.
