The Central Bank of Korea (BOK) has raised fresh concerns about launching stablecoin assets tied to its national currency, the Korean won. The country’s new leadership supports this move as part of its digital finance plans. However, the Bank of Korea is concerned that if not carefully managed, the use of US dollar stablecoins could increase. Central Bank Raises Risk of Higher Dollar Use At a press briefing on Wednesday, Bank of Korea Governor Lee Chang-yong shared his worries. He explained that creating won-based stablecoins may lead to more exchanges between won and dollar stablecoins. According to Lee, this move might not reduce the use of U.S. dollar stablecoins as expected. Instead, it could make it easier for users to switch between the won and dollar stablecoins, leading to even greater reliance on the U.S. dollar in digital transactions. He warned that this trend would make it harder for the central bank to monitor and control foreign exchange movements. Beyond currency concerns, the central bank also worries about stablecoins’ impact on South Korea’s banking industry. The Bank governor noted that if more people use stablecoins for payments and settlements, traditional banks could lose their role in these areas. That would affect their profits and overall stability. Government Supports Stablecoins to Protect Local Economy Government Supports Stablecoins to Protect Local Economy President Lee Jae Myung, who recently took office, has expressed support for launching a won-backed stablecoin. He aims to stop capital from leaving the country and modernize Korea’s financial system for the digital age. However, his plan now faces skepticism from the central bank, which is urging a more careful approach. Still, Governor Lee clarified that the Bank of Korea is not entirely against the idea. Despite the central bank’s concerns, the governor said the bank is not against the idea. The financial institution just wants clear rules and safety measures to be in place. To address these concerns, the Ministry of Economy and Finance and the Financial Services Commission will join the central bank in discussing stablecoin policies. They will focus on ensuring that stablecoins can be used safely and do not harm the local economy or financial institutions. Global Stablecoin Market Is Growing Amid Clearer Rules The global stablecoin market is growing fast, with a total value of over 261 billion dollars. Most of this comes from US dollar-pegged stablecoins, which comprise more than 253 billion dollars. With the recent passing of the GENIUS Act in the Senate , the U.S. is also moving quickly to set up clear rules for these digital assets The post South Korea Bank Issues Crucial Won Stablecoin Warning appeared first on TheCoinrise.com .
