South Korea warns of chaos if stablecoin issuance runs rampant

The Governor of the Bank of Korea, Mr. Lee Chang-yong, warned that allowing more non-bank organizations to issue won stablecoins could lead to "monetary chaos" similar to the 19th century.

The statement was made in the context of the South Korean government promoting the issuance of a domestic stablecoin in line with President Lee Jae-myung's election pledge. However, Mr. Lee believes that delegating payment services and the issuance of stablecoins to the private sector could conflict with foreign exchange policy and disrupt the current profit model of banks.

He also stated that the Central Bank cannot make unilateral decisions regarding policies related to stablecoins and will wait for a clear delineation of roles among the ministries before determining the next direction.

Meanwhile, many large companies like KakaoPay have registered trademarks for stablecoin tokens and have clearly benefited from the stablecoin wave, with shares rising over 120% since June. In contrast, the Central Bank's CBDC pilot project has been paused to monitor the development of legislation related to stablecoins.