[Bitcoin Now] "Japan Has Issued Stablecoins Too... Bank of Korea Wasting Time on Seven Baseless Rumors"

Korea Fintech Industry Association Forum
Bank of Korea: "We Are Not Opposed to Stablecoins"
Political and Academic Circles: "Only Raising Issues, No Solutions Presented"

"Japan established a stablecoin law in June and issued its first stablecoin on October 27. This is something we need to pay attention to," said Ando Geol, a member of the Democratic Party of Korea.

"The Bank of Korea is wasting time and energy on seven baseless rumors. While global competition is intensifying, it is disappointing to see that only we are standing still," said Min Byungdeok, also a member of the Democratic Party of Korea.

On November 10, a 'Korean Won Stablecoin Forum' was held at the Korea Federation of SMEs in Yeouido, Seoul, hosted by Assemblymen Ando Geol and Min Byungdeok of the Democratic Party of Korea and the Korea Fintech Industry Association. At the forum, both political and academic circles agreed that swift action is necessary to avoid falling behind in the global virtual asset competition.

They also refuted the concerns about stablecoins raised by the Bank of Korea on October 27. The Bank of Korea cited several risks associated with Korean won stablecoins: the risk of depegging (when the value of a stablecoin diverges from its underlying asset), financial stability threats such as coin runs (large-scale redemption demands by coin investors), gaps in consumer protection, risks of circumventing foreign exchange and capital regulations, weakened effectiveness of monetary policy, and a diminished role of financial intermediation.

Assemblyman Min Byungdeok criticized, "Even if the central bank is taking a cautious approach, many of these concerns show a lack of understanding of the global financial innovation trends and the actual operational mechanisms of stablecoins."

In his keynote speech, Moon Cheolwoo, President of the Digital Asset Finance Association and professor at Sungkyunkwan University, said, "The Bank of Korea has expressed concerns about whether the value of the Korean won stablecoin can truly be trusted." He explained, "Trust is a social asset that is formed over time through institutional safeguards and repeated usage experiences."

He went on to explain that after the passage of the 'Genius Act' in the United States, stablecoins experienced explosive growth. He argued that regulatory clarity actually served as a catalyst for the real-world use of stablecoins, emphasizing the need for swift institutionalization.

Kang Hyunggu, professor at Hanyang University’s Department of Finance and Business, stated, "There are claims that stablecoins function as money but operate outside the scope of central banks and monetary policy, but this assumption is incorrect. Many countries have already established countermeasures."

Representatives from the Bank of Korea who attended the forum agreed on the introduction of Korean won stablecoins but stressed the need to examine the associated risks. Park Junhong, manager at the Bank of Korea’s Financial Settlement Bureau, said, "The Bank of Korea actively agrees with and supports the innovative potential of Korean won stablecoins. However, as there are also seven major risk factors, our position is to work together to develop a balanced regulatory framework while pursuing innovation."

No Jinyoung, manager of the Policy and Institutional Team at the Bank of Korea’s Monetary Policy Bureau, explained, "The increase in liquidity in the non-financial sector is a concern for central banks around the world. The subprime crisis was also considered innovative at the time, but it ultimately erupted because of unforeseen aspects."

The forum was held in two sessions. In the first session, Jang Boseong, a researcher at the Korea Capital Market Institute, gave a presentation on "The Impact of Korean Won Stablecoins on Monetary Policy and Policy Proposals." He explained, "Stablecoins are an innovation led by the private sector, but they can also affect overall monetary policy. It is necessary to conduct a detailed analysis of their impact on macroeconomic variables such as capital flows, exchange rates, and liquidity, while maintaining a balance between financial stability and market innovation."

In the second session, Lee Jongseop, a professor at Seoul National University, presented on "Measures to Promote the Adoption of Korean Won Stablecoins." He emphasized, "Korean won stablecoins will become a core infrastructure for the digital financial ecosystem, going beyond simple payment innovation. By building an open blockchain network based on on-chain finance, Korea should aim to become a hub leading the global digital financial order."

The panel discussion was moderated by Jung Yooshin, president of the Digital Economy Finance Research Institute, and Shin Sanghoon, visiting professor at Yonsei University. Participants included Cho Jinseok, CEO of KODA; Shin Yongwoo, attorney at Jipyung Law Firm; Choi Yeontaek, executive director at Samjong KPMG; Jung Gutae, CEO of Infinitblock; Lee Seongmi, CEO of CODE; Lee Byungkyu, director at Naver Financial; and Hyun Jihae, attorney at Changcheon Law Firm.