BOK Proposes Limiting Won Stablecoins to Banks

South Korea's Central Bank (BOK), in its report submitted to the National Assembly Strategy and Finance Committee, advocated limiting won stablecoin issuances to commercial banks. This proposal brings to the forefront the role of stablecoins in the crypto ecosystem and their potential impacts on assets like BTC detailed analysis.

BOK's Won Stablecoin Issuance Recommendation

The BOK emphasized that digital tokens issued by the private sector could undermine monetary policies and create currency and financial stability risks. Classifying won stablecoins as "money-like substitutes," it called for considering not only industrial benefits but also monetary policy, currency stability, and financial risks in the issuance process. This approach reflects efforts to regulate the integration of stablecoins with traditional finance.

Monetary Policy and Financial Stability Risks

The proliferation of stablecoins could complicate central banks' control over money supply. The BOK noted that these tokens could bypass foreign exchange regulations and violate the separation of banking and commerce. Technically, depeg events seen in algorithmic stablecoins (such as the UST collapse) could create similar systemic risks in won-based versions. Banks can manage these risks through capital adequacy ratios (Tier 1 capital 8%+) and AML/KYC compliance.

Bank-Centric Consortium Model

The BOK recommended initially permitting commercial banks, followed by gradual expansion through risk assessments. Banks' subjection to capital, governance, and compliance standards ensures the segregation of stablecoin reserves. This model enhances reliability through regulated structures, similar to liquidity providers in the BTC futures transactions market. Potential consortia could include institutions like KB Kookmin and Shinhan Bank.

US GENIUS Act and Multi-Agency Oversight Proposal

As lawmakers debate who the issuers should be, the BOK proposed a bank-centric consortium and multi-agency oversight similar to the US GENIUS Act. While the GENIUS Act envisions federal-state coordination for stablecoins, the BOK's model shows similarities through FSS and FSC integration. This could strengthen the bridging role of stablecoins in markets like BTC spot transactions.

Future of Won Stablecoin Discussions

The discussions have been postponed to January due to delays. This postponement creates an opportunity for detailed impact analyses while necessitating alignment with global trends (such as EU MiCA). Experts predict that won stablecoins could impact 20% of Asia's crypto trading volume, indirectly supporting BTC dominance.