The Central Bank of South Korea has expressed caution against the potential consequences of issuing cryptocurizing cryptowalus winnings, increasing the fears that their adoption can accidentally augment the demand for stablelecoin secured in American dollars.
Governor of the Korea Bank (BOK) Lee Chang-Yong warned that such events can undermine wider monetary policy goals and complicate currency management.
Stablecoin Class policy with currency management
Speaking on the press briefing on Wednesday, the Governor of Lee noticed that instead of reducing the influence of stableleins denominated in dollars, local emission Stablecoin can facilitate their employ.
“Issuing Stablecouins may not reduce the use of dollar stableins, but rather facilitate the exchange between Stablecouins dollars and won Stablecouins,” he said.
According to Lee, this change can ultimately augment the demand for Stablecouins dollar, which can act against the wider program of President Lee Jae Myung, consisting in strengthening the role of Korean winning in digital finances.
While President Lee was in favor of the development of cryptocurials based on BRW to support reduce capital outflows and build immunity in digital economy, the BOK attitude indicates a more cautious approach.
Governor Lee explained that the central bank is not essentially against Stablecouins cryptocurrencies supported by Korean winnings, but emphasized that there must be regulatory framework to manage their impact on financial stability.
In particular, he pointed to challenges in currency supervision and risk for the time-honored banking sector. One of the areas of anxiety is to transfer payment and settlement services away from banks in relation to non -banking entities that would manage Stablecoin transactions.
Lee called for a broader discussion on how such a transition can affect the bank’s profitability and the general structure of the financial industry. “We need to paint a larger picture about how the banking industry, such as its profitability, [would be affected] In the event that payment and settlement services go to Stablecouins, “he said.
Global national trends and considerations
The ongoing debate in South Korea appears among significant achievements in Stablecoin regulation on the international arena. In the United States, the recent adoption of the Genius Act, which aims to regulate and encourage the employ of Stablecoin, intensified discussions on the role of these digital assets in both domestic and global financial systems.
As of today, cryptographic Stablecouins jointly represent market capitalization of over $ 260 billion, with over $ 253 billion in tokens gaining in American dollars, according to Coingecko data.
It is expected that the South Korean Ministry of Economy and Finance and the Commission for Financial Services will cooperate with the BOK in the field of shaping Stablecoin’s future policy.
Whether the country can implement a successful strategy of BRW Stablecoin without the escalation of the dollar dependence remains the main challenge.
A distinguished picture created from DALL-E, chart from TradingView
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