BOK, gov't urged to coordinate policies on won-based stablecoins

Bank of Korea (BOK) Gov. Rhee Chang-yong attends the 2025 BOK International Conference at the central bank in Seoul, June 2. Yonhap

The government and Bank of Korea (BOK) appear to be on a collision course over whether non-bank private entities should be allowed to issue won-based stable coins, which was a main campaign pledge of President Lee Jae-myung, observers said Sunday.

Further advancing the policy drive is the recent addition of Kim Yong-beom, former CEO of Hashed Open Research, a private blockchain, Web3 and crypto think tank, as top presidential economic policy adviser.

Kim, the former vice finance minister and vice chairman of the Financial Services Commission (FSC), is a vocal advocate for the prompt institutionalization of private won-based stablecoins.

However, the central bank vehemently opposes this view, stressing that the means of payment essentially functions as a substitute for fiat currency, wildly undermining the effectiveness of monetary policy.

Also under threat is financial stability — one of the dual mandates of the central bank alongside price stability. These problems include the possibility of a "coin run” whereby a large number of customers seek redemption en masse, alarmed by a sharp depreciation in stablecoin value. In this case, coin issuers should cash large deposits or sell off government bonds to meet liquidation demands, causing a major stress event for the country's financial system.

BOK Gov. Rhee Chang-yong remains adamant that the central bank should have a decisive say in policy development as a prerequisite for issuance of the digital assets.

According to the digital asset committee under the Democratic Party of Korea (DPK), launched under the directive of Lee as a presidential candidate to promote virtual asset policies, Rhee’s stance falls behind global standards.

“The central bank-controlled licensing and oversight model, as advocated for by Rhee, fails to serve the national interest,” the committee said in a statement, June 2.

“Korea could fall behind in global competition, due to lagging regulatory and technological stances. The issue should be determined democratically through the National Assembly's legislative efforts.”

Rep. Min Byoung-dug, the committee's chair, said the global regulatory trend is moving toward transparent oversight that embraces private-sector innovation.

“The potential of won-based stablecoins is not limited to domestic payment but expands to bolstering partnerships with existing fintech platform operators, a synergy best realized when led by the private sector,” he said.

“Korea must foster a forward-looking won-based stablecoin ecosystem.”

Meanwhile, the central bank's concern reflects the growing use of stablecoins.

According to BOK data, stablecoin trading volume on domestic exchanges surged to 60.3 trillion won ($44.2 billion) in the October-December period last year, more than tripling from 17 trillion won in three months earlier.

Similarly, data from blockchain analytics firm RWAxyz showed the global market capitalization of stablecoins at $235.3 billion as of last week, up 47 percent from the previous year.