Bank of Korea Proposes Cautious Stablecoin Introduction
- Bank of Korea supports bank-led stablecoins, delaying direct CBDC plans.
- Major financial institutions participating in joint venture.
- Stablecoin launch targets reduced USD dependency in South Korea.
The Bank of Korea is advocating for a bank-led rollout of stablecoins pegged to the Korean won, amid regulatory oversight from the Financial Services Commission and banks in South Korea.
This move aims to reduce dependency on USD-backed stablecoins, bolster domestic digital finance, and modernize Korea’s financial infrastructure, potentially impacting the cryptocurrency market and banking sectors.
Bank of Korea promotes a bank-led rollout of stablecoins pegged to the Korean won under regulatory guidance in South Korea.
This cautious approach aims to enhance digital finance infrastructure and decrease reliance on USD-backed stablecoins.
Bank of Korea to Introduce Won-Pegged Stablecoins
The Bank of Korea is advocating a cautious rollout of Korean won-pegged stablecoins. This follows previous direct CBDC experiments led by Governor Lee Chang-yong.
Ryoo Sangdai, Deputy Governor, Bank of Korea, “Banks should be the primary issuers of stablecoins in the country before gradually expanding to other sectors.” – Source
The Financial Services Commission plays a central role in regulatory oversight. Eight major commercial banks are preparing for this initiative to lower USD dependence.
Stablecoin Plan Could Reshape South Korea’s Payment Systems
This strategy could impact domestic payment systems and bolster the local financial ecosystem. It involves institutional collaboration and regulatory backing to sustain confidence.
The move is seen as a safeguard for financial markets against USD volatility. It has raised optimistic yet cautious sentiment in several sectors.
Lessons from Stablecoin Trials in Japan and Hong Kong
Past stablecoin trials in Japan and Hong Kong showed increased institutional interest due to regulatory clarity, paralleling Korea’s current trajectory.
Experts suggest the initiative might bolster institutional liquidity and potentially lead to innovations in digital payments within South Korea.
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