South Korea’s Central Bank Wants to Oversee Stablecoins

The country joins other jurisdictions in proposing standards for stablecoin issuance.

AccessTimeIconDec 7, 2022 at 5:50 p.m. UTC
Updated Dec 7, 2022 at 7:08 p.m. UTC

The Bank of Korea (BoK) wants to monitor stablecoins, according to a report the bank issued Monday, singling out stablecoins as needing more stringent regulation than other digital assets because they have the potential to undermine financial stability.

The BoK’s report echoes concerns of jurisdictions across the world that are drawing up proposals to regulate stablecoins.

The report argues that stablecoin issuers should be required to have minimum capital and reserve assets to minimize the possibility that the risks of digital assets would be transferred to the payment and settlement system.

It also said that crypto-asset businesses should be registered and authorized to operate and be subject to regular external audits.

Cryptocurrency needs to be regulated through a special law because its issuance structure and market system are different from securities and fiat currencies, making it difficult to respond with existing regulations, the report said.

The country’s politicians are attempting to form a comprehensive regulatory framework for crypto assets, but partisan gridlock over the national budget has stalled discussions on crypto-related bills.

The collapse of South Korea-based stablecoin issuer Terraform Labs in May prompted the country's policymakers and lawmakers to scrutinize the domestic crypto industry.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Lavender Au

Lavender Au is a CoinDesk reporter with a focus on regulation in Asia. She holds BTC, ETH, NEAR, KSM and SAITO.