The Bank of Korea’s push for the banking sector to lead the rollout of won-denominated StableCoins lacks logic, said Dr. Sangmin Seo, the head of the Kaia DLT Foundation.
In a report Released on Monday, the Central Bank argued that banks are already subject to strict regulations, including capital, foreign exchange, and anti-money laundering requirements, which will help reduce any risks associated with Introducing StableCoins in the country.
At the same time, the BOK wants a policy consultation policy that jointly consists of currency, foreign exchange, and monetary authorities to decide on eligibility, volume and other key considerations.
SEO told Cointelegraph that while central banks’ concerns about StableCoin’s risks are understandable, its argument for banks leading a rollout “seems to lack a logical foundation.”
Clear rules for everyone are a better way forward: SEO
SEO argued that a better solution would be to establish clear rules for StableCoin issuers that could “reduce financial and innovation risks.”
He said it would also allow both banking and non-banking institutions that meet these standards to “compete and showcase their strengths.”
“It would be more important if the Bank of Korea could provide guidelines on how to mitigate these risks and what qualifications are required for an issuer to be considered trustworthy.”
In June, Bok Deputy Governor Ryoo Sangdai suggested that South Korean banks Be the main issuer of StableCoins in the country to ensure a safety net, before gradually expanding to other sectors.
The banning of StableCoin is also on the table
The bok also wants to ban Interest Payments on StableCoins.
SEO said that a total ban on StableCoin yield is an extreme measure and could harm and limit adoption.
“While I agree that StableCoins themselves should not include any yield-bearing features, I believe it would be too much to restrict the generation of additional yield through the use of StableCoins,” he said.
“Doing so would significantly limit their utility and adoption; therefore, I think adding supplemental yield is warranted.”
South Korea’s StableCoin Market Heating Up
At least eight major banks in South Korea announced plans in June To offer a stablecoin pegged to South Korea won, with a planned launch in late 2025 and early 2026.
Related: South Korea’s crypto lending rates at 20%, leveraged loans are prohibited
Meanwhile, Naver Financial, the fintech arm of South Korean tech conglomerate Naver, is is reportedly moving forward with a plan to acquire Dunamu.
The crypto industry in South Korea has benefited from a more favorable environment following The election of President Lee Jae-Myung in Junewhich has since pushed various crypto-related laws, including a Bill to legalize stableCoins.
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