Bank of Korea Governor: Does not oppose stablecoins based on the Korean won, but is concerned about foreign exchange

The Governor of the Bank of Korea, Lee Chang-yong, issued a warning on Wednesday, stating that while he does not oppose the issuance of a Korean won stablecoin, he is concerned that this move could backfire—potentially increasing reliance on US dollar stablecoins rather than reducing it, and complicating foreign exchange controls, thereby threatening the effectiveness of monetary policy. According to media reports on Wednesday, Lee Chang-yong candidly stated at a press conference in Seoul: Issuing a Korean won stablecoin may make it easier to exchange with US dollar stablecoins, which in turn could increase the demand for US dollar stablecoins, making it difficult for us to manage foreign exchange. This statement exposes the core contradiction faced by South Korea's monetary authorities: the need to embrace digital asset innovation while maintaining effective control over capital flows. The central bank governor's concerns point directly to the essence of the issue—Korean won stablecoins could become a new channel for capital outflows. Regulatory agencies in many countries are skeptical of cryptocurrencies, as they are seen as speculative currencies and competitors to national currencies. Last month, the Governor of the Bank of Korea, Lee Chang-yong, warned that stablecoins issued by non-bank entities could undermine the effectiveness of monetary policy and capital flow controls, and that the central bank should lead the regulation of stablecoins pegged to the Korean won. Earlier, the ruling party in South Korea proposed a fundamental digital asset bill earlier this month, aimed at establishing the necessary regulatory infrastructure to assist local companies in issuing Korean won stablecoins. Notably, President Lee Jae-myung appointed former cryptocurrency company executive Kim Yong-beom as Chief Policy Officer in his first week in office, further fueling speculation that the government would take action to allow the issuance of stablecoins backed by the Korean won. Kim Yong-beom's resume is quite impressive: he previously served as Vice Chairman of the Financial Services Commission and later became the CEO of Hashed Open Research, a think tank under the cryptocurrency venture capital firm Hashed Ventures Inc. This appointment sends a clear signal—the new government's attitude towards cryptocurrencies is much more positive than that of its predecessor