Bank of Korea warns local stablecoins could boost dollar demand against presidential goals
Quick Take South Korea’s central bank governor expressed concerns that local currency-based stablecoins could spur more demand for U.S. dollar stablecoins. This conflicts with the president’s agenda to push KRW stablecoins to prevent the outflow of domestic capital.
Lee Chang-yong, the governor of South Korea's central bank, expressed concerns about the country's early-stage explorations of Korean won-pegged stablecoins, saying they could induce more demand for the U.S. dollar.
"Issuing won stablecoins may not reduce the use of dollar stablecoins, but rather facilitate the exchange between dollar stablecoins and won stablecoins, which may increase the demand for dollar stablecoins," Lee said in a press briefing on Wednesday.
Lee noted that this could pose challenges for the central bank in overseeing foreign exchange.
The central bank official's warning clashes with new South Korean President Lee Jae Myung's agenda to promote won-pegged stablecoins, mainly to serve the purpose of preventing capital flight in the era of digital finance.
Nonetheless, the BOK governor clarified that the central bank does not oppose the issuance of KRW stablecoins and sees a need for such assets, provided appropriate measures are in place to manage the risks.
The central bank also raised concerns about possible disruptions that the introduction of local stablecoins could cause to the banking sector, as payment and settlement services would be moved to non-banking entities.
"We need to paint the bigger picture on how the banking industry, such as its profitability, in case payment and settlement services move to [stablecoins]," Lee said.
The BOK leader added that the Ministry of Economy and Finance and the Financial Services Commission will discuss shaping policy around won-pegged stablecoins.
Discussions around local stablecoins have accelerated following intensified efforts in the U.S. to establish a regulatory framework and promote dollar-pegged stablecoins, notably with the GENIUS Act recently passing its final Senate vote.
Stablecoins currently have a market capitalization of over $261 billion, with U.S. dollar-pegged stablecoins accounting for more than $253 billion, according to CoinGecko data .
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
New spot margin trading pair — HOLO/USDT!
FUN drops by 32.34% within 24 hours as it faces a steep short-term downturn
- FUN plunged 32.34% in 24 hours to $0.008938, marking a 541.8% monthly loss amid prolonged bearish trends. - Technical breakdowns, elevated selling pressure, and forced liquidations highlight deteriorating market sentiment and risk-off behavior. - Analysts identify key support below $0.0080 as critical, with bearish momentum confirmed by RSI (<30) and MACD indicators. - A trend-following backtest strategy proposes short positions based on technical signals to capitalize on extended downward trajectories.
OPEN has dropped by 189.51% within 24 hours during a significant market pullback
- OPEN's price plummeted 189.51% in 24 hours to $0.8907, marking its largest intraday decline in history. - The token fell 3793.63% over 7 days, matching identical monthly and yearly declines, signaling severe bearish momentum. - Technical analysts cite broken support levels and lack of bullish catalysts as key drivers of the sustained sell-off. - Absence of stabilizing volume or reversal patterns leaves the market vulnerable to further downward pressure.
New spot margin trading pair — LINEA/USDT!
Trending news
MoreCrypto prices
More
