South Korea’s central bank may support a stablecoin pegged to the won, but has concerns about foreign exchange impacts.
- Bank of Korea not against launching a won-backed stablecoin.
- Concerns raised about increased use of US dollar stablecoins.
- New law could pave way for regulated digital asset issuers.
Central Bank Open to Stablecoin Idea
The head of South Korea’s central bank, Rhee Chang-yong, said he is not against a stablecoin linked to the Korean won. This comes as the country looks at new ways to manage digital money. However, he also warned that doing so could make people use more US dollar-based stablecoins like USDT instead.
Forex Management Worries
Rhee explained that using a won-based stablecoin may lead to easier exchanges for dollar coins. That could increase demand for them and make it hard for the country to manage its foreign exchange reserves. In the last six months, South Korea’s forex reserves dropped by $11 billion, from $415.6 billion to $404.6 billion.
New Digital Asset Bill Proposed
On June 10, South Korea’s government introduced the Digital Asset Basic Act. It would allow companies with at least $368,000 in capital to issue stablecoins. These firms must also have enough reserves for refunds and need approval from the Financial Services Commission (FSC). This is part of the government’s plan to build a safe crypto environment.
Market Shift Toward New Stablecoins
Currently, Tether (USDT) and USDC dominate the stablecoin market, with $156 billion and $61 billion in value. But newer options are gaining ground. For example, EURC, a euro-based coin from Circle, grew by 156% this year to reach $203 million in value. South Korea’s stablecoin initiative may be the next step in changing the global stablecoin market.
Source: cointelegraph.com
