SEOUL / LONDON (IT BOLTWISE) – South Korea’s central bank is betting on banks as key players in stablecoin adoption. This decision has drawn criticism as experts argue that clear rules for all issuers could be a better solution. The debate about the role of banks and the regulation of stablecoins is gaining momentum.
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The Bank of Korea (BOK) recently suggested that the country’s banks should be the main players in stablecoin adoption. This decision is based on the assumption that banks are already subject to strict regulations that could minimize potential risks. Dr. However, Sangmin Seo, chairman of the Kaia DLT Foundation, criticizes this approach as illogical and advocates for clear rules for all stablecoin issuers.
Seo argues that a regulatory framework that includes both banks and non-banks could promote innovation while minimizing monetary risks. This would allow different institutions to demonstrate their strengths and compete. The BOK, on the other hand, plans to set up an advisory body that will decide on the approval of issuers and the volumes.
Another controversial point is the planned ban on interest payments on stablecoins. The BOK fears that such rates could compete with bank deposits and disrupt the sector. Instead, it proposes the commercialization of deposit tokens. Seo believes a complete ban on stablecoin yields is overkill and warns that it could significantly limit adoption.
The South Korean stablecoin market is facing disruption as several major banks plan to launch their own stablecoins by 2026. At the same time, Naver Financial plans to launch a won-backed stablecoin project after acquiring Dunamu. The election of President Lee Jae-myung has resulted in a more favorable environment for cryptocurrencies, further spurring development in this area.
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