Stablecoin Chaos Looms Over Korea 🚨

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In the land of the morning calm, a sense of unease settled over the Bank of Korea’s Governor, Lee Chang-yong. He warned of the impending doom that could befall the nation’s monetary policies and foreign exchange regulations, all due to the issuance of stablecoins by non-bank entities 🤯.

A Recipe for Disaster?

At a press conference, Governor Lee expressed his concerns about the potential chaos that could ensue if multiple non-bank institutions were to issue won-pegged stablecoins. “It’s a recipe for disaster,” he seemed to say, “a confusion akin to the Wild West of private currency issuance in the 19th century 🤠.”

“Imagine it, if you will,” he continued, “a situation where monetary policy is as effective as a chocolate teapot, and the nation is forced to return to a central bank system 🤦‍♂️.” The very thought sent shivers down his spine.

The Governor’s concerns didn’t stop there. He warned that the indiscriminate issuance of won-pegged stablecoins could conflict with foreign exchange liberalization policies, and that non-bank entities handling payments and settlement services could significantly alter the profit structure of banks 📉.

But fear not, dear citizens, for the Governor has a plan. Well, not exactly a plan, but he’s willing to discuss the issue with the relevant authorities, once the pertinent minister is appointed 🤝.

Meanwhile, the momentum of stablecoins in the country continues to grow. A member of the Democratic Party of Korea, Min Byeong-deok, has proposed a comprehensive legislation to establish a more structured regulatory framework for crypto assets, including a licensing system for stablecoin issuers and clear rules 📜.

The proposed Digital Assets Basic Act is expected to complement the Virtual Asset Investor Protection Act, potentially allowing non-bank entities to participate in the issuance of stablecoins 🤝.

But the banking sector is not one to be caught off guard. They’re preparing for two legalization scenarios, like a chess player anticipating their opponent’s next move 🏰. They’re considering a business model where banks establish a joint venture to collectively issue stablecoins, while also contacting various non-bank companies to prepare for the legalization and issuance of stablecoins 📈.

And so, the game of stablecoin cat and mouse continues. The Bank of Korea has halted its Central Bank Digital Currency (CBDC) project, the Hank River Project, ahead of its second phase of testing 🚫. But the banks are not giving up. They’re discussing stablecoins with the BOK, other banks, “payment” companies, crypto exchanges, and blockchain companies, like a group of conspirators plotting their next move 🤫.

A Shift in the Digital Asset Landscape

The atmosphere in South Korea is shifting, like the winds of change blowing through the land 💨. The Bank of Korea has pivoted to the sector, and the financial institutions are following suit 🔄.

The BOK and seven banks finished the first phase of testing in June, but the second stage has been suspended 🚫. The project was going to focus on testing peer-to-peer transfers, expanding payment merchant locations, and simplifying authentication methods 📊.

But the banks are not willing to bear the “excessive cost burden without concrete plans for commercialization” 🤑. They’ve requested that the BOK establish a CBDC General User Real-Transaction Test Task Force, involving all relevant departments of the Bank of Korea and banks 🤝.

The request aimed to develop a long-term roadmap, including post-test commercialization plans 🗺️. But the Bank of Korea is taking a wait-and-see approach, like a wise old sage contemplating the mysteries of the universe 🤔.

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2025-07-11 07:49