SEOUL, October 29 (AJP) - Bank of Korea Governor Lee Chang-yong voiced caution on Wednesday over the potential introduction of a won-denominated stablecoin, warning that such a digital currency could trigger capital outflows and heighten volatility in the currency market.
“Many people might take the won stablecoin abroad, which is worrisome,” Lee told lawmakers during a parliamentary audit, stressing that a hasty rollout could pose financial stability risks.
Lee said any move toward a stablecoin backed by the South Korean won should proceed in stages, beginning with limited tests led by commercial banks. “If foreign exchange outflows are well controlled, then we can expand,” he said.
The governor also raised concerns that a won-based stablecoin could be exploited to evade regulations — an issue that has long troubled policymakers in South Korea.
His comments came in response to Democratic Party lawmaker Ahn Do-geol, who advocated for the adoption of a domestic stablecoin. “My view is very different,” Lee said, emphasizing the need for prudence over speed.
Lee added that even with the launch of a won stablecoin, demand for dollar-based digital currencies would likely persist, as many investors use them to shift assets into dollars.
“The idea that dollar stablecoins will dominate our won payment market is premature,” he said, “but we must strengthen regulation as their use continues to grow.”
* This article, published by Aju Business Daily, was translated by AI and edited by AJP.
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