Bank of Korea Governor Lee Chang‑yong said on Wednesday in Seoul that he does not oppose the idea of a stablecoin tied to the Korean won, but warned that it could affect foreign exchange stability and shake up the banking industry.
His comments came during a press briefing on price stability, where he outlined concerns and next steps.
A Measured Approach
Governor Lee told reporters that introducing won‑based stablecoins could make it easier for users to swap them for dollar stablecoins.
He questioned whether that shift would boost demand for dollar tokens and complicate foreign exchange management. He said the central bank must study these effects carefully before moving forward.
Impact on Foreign Exchange Markets
Lee warned that if traders can quickly trade won‑backed tokens for dollar‑linked ones, it might trigger greater pressure on the won.
He said the bank must consider how sudden shifts in stablecoin flows could strain its ability to keep exchange rates on track. Stability in the FX market is central to the bank’s mandate.
Banking Sector Concerns
The governor also voiced worry that popular stablecoins might draw payment and settlement functions out of banks and into non‑bank firms.
He noted that loss of these services could hit banks’ profit models and force them to rethink their core businesses. Lee said any move on stablecoins should take into account the long‑term health of commercial banks.
Need for Policy Coordination
Lee said policy for stablecoins now lies with multiple ministries and agencies. He promised to work more closely with the Ministry of Strategy and Finance and the Financial Services Commission.
He called for a comprehensive plan that balances the benefits of digital tokens with possible downsides for markets and institutions.
Ongoing Digital Currency Work
The Bank of Korea has already run experiments on a central bank digital currency. Lee said those trials will continue, but full issuance of stablecoins will require talks with regulators. He stressed that stablecoins and a CBDC serve different roles and must follow clear rules.
Government Views on Rate Policy
During the same briefing, Lee addressed questions about the pace of interest rate cuts.
He said the bank will weigh household debt levels, housing market trends, and foreign exchange moves when deciding on future rate cuts. He did not commit to a specific timetable or size for the next reduction.
President’s Push for Local Tokens
Earlier President Lee Jae‑myung introduced a bill to let domestic firms issue stablecoins. The move fulfills his campaign promise to boost Korea’s digital asset sector and keep capital inside the country. The plan aims to make Korea one of the first large economies with clear rules for private stablecoins.
Lee Chang‑yong said stablecoins could offer faster, cheaper payments if handled right. But he added that regulators must guard against risks to financial stability and the banking system’s business model.
He urged all stakeholders to look at stablecoins in the context of wider market structure and economic health. The governor said the central bank will publish findings from its CBDC trials and stablecoin studies later this year.
He expects detailed proposals after talks with government agencies. Lee said the bank will also monitor global developments and learn from other countries that have launched private and public digital currencies.
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