- Bank of Korea supports won-pegged stablecoins but warns of forex management risks.
- New digital asset bill proposes stablecoin rules as reserves fall $11 billion.
South Korea’s central bank has signaled openness to a won-pegged stablecoin but warned it could complicate the country’s efforts to manage foreign exchange.
According to Cointelegraph, Bank of Korea Governor Rhee Chang-yong said he is not opposed to the issuance of a domestic stablecoin but noted that it may increase reliance on dollar-based tokens.
The comments come as South Korea’s foreign currency reserves continue to decline. Data from the Bank of Korea shows reserves fell from $415.6 billion in December to $404.6 billion in May, a drop of $11 billion over six months.
The government is now advancing new regulation for digital assets under President Lee Jae-myung. On June 10, the ruling Democratic Party proposed the Digital Asset Basic Act, a bill that would allow companies to issue stablecoins under specific conditions.
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The draft law requires issuers to hold minimum equity capital of $368,000 and maintain sufficient reserves to honor redemptions. Issuance would also require approval from the Financial Services Commission (FSC).
The FSC has reportedly launched a probe into the transaction fees charged by domestic crypto exchanges, as part of the administration’s broader effort to lower costs for retail traders.
Globally, stablecoins backed by the U.S. dollar continue to dominate the market. Tether (USDT) and USD Coin (USDC) currently have a combined market cap exceeding $200 billion, according to DefiLlama. However, euro-pegged alternatives are gaining ground.
Circle’s euro-backed EURC has reportedly seen a 156% rise in market capitalization this year, reaching $203 million. While the Bank of Korea is open to innovation, concerns over monetary control and dollar dependency remain central to the discussion.
