South Korea’s central bank governor, Rhee Chang-yong, expressed openness to the idea of issuing stablecoins denominated in the Korean won but flagged concerns over managing foreign exchange flows. Speaking at a press conference in Seoul, Rhee warned that won-based stablecoins could be easily exchanged for U.S. dollar stablecoins, potentially increasing demand for the dollar-linked tokens and complicating forex management.
Stablecoins are cryptocurrencies pegged to stable assets like the U.S. dollar and are widely used in crypto markets for quick fund transfers. While regulators globally remain wary of cryptocurrencies due to their speculative nature and potential competition with national currencies, South Korea’s government appears poised to embrace won-based stablecoins.
President Lee Jae Myung, who took office recently, is advancing his campaign promise to allow local firms to issue won-backed stablecoins. The ruling Democratic Party introduced the Digital Asset Basic Act this month, aiming to create a regulatory framework for such issuances.
The president also appointed Kim Yong-beom, former crypto firm chief and ex-vice chairman of the Financial Services Commission, as his chief policy officer, signaling stronger government backing for crypto initiatives.
Governor Rhee previously cautioned that letting private companies issue stablecoins could undermine the central bank’s control over monetary policy and capital flows, making regulatory oversight a critical challenge.