South Korea’s Central Bank Urges Caution: Stablecoins Need Slow, Strategic Rollout

South Korea’s central bank just dropped a reality check on the crypto hype train—stablecoins shouldn’t sprint out the gate. Here’s why regulators are hitting the brakes.

The Slow Lane Wins the Race

While DeFi degens scream 'wen moon?' over algorithmic stablecoins, Seoul’s monetary authorities are preaching patience. Their warning? Move too fast, and you’ll replay Terra-LUNA’s collapse—this time with government fingerprints all over it.

Regulators vs. Innovation (Again)

Another day, another central bank treating crypto like a toddler with a grenade. But let’s be honest—after seeing 'stable' coins evaporate $40B in hours, maybe their paranoia’s justified. For once.

The Punchline

Bankers want 'measured adoption.' TradFi wants control. Crypto builders just want to disrupt. Meanwhile, your USDT trades at $0.997. Progress!

Central bank links stablecoins to South Korea’s policy, economy, and pilot project

South Korea’s new government also plays a big role here. President Lee Jae Myung, who’s from the Democratic Party, had promised during his campaign to open doors for companies to issue won-based stablecoins. That promise is now moving toward law, with the party proposing legislation to create a full regulatory setup. They don’t want South Korea falling behind other markets already experimenting with national stablecoins.

Ryoo also addressed housing and household debt. He said the BOK now considers both rising home prices and ballooning debt as key risks. He added that last month’s interest rate cut moved the benchmark rate into the middle of the neutral range—meaning the central bank now has flexibility to either lower or raise rates if needed.

On digital currency, Ryoo said the BOK is preparing for a second pilot test of its central bank digital currency, or CBDC. He said the bank will work with commercial lenders on the next phase, depending on how the administration’s digital policy develops. The first test, which started in late 2023, is ending next week. That project was done alongside the Bank for International Settlements, which helps coordinate central banks globally.

Lastly, Ryoo confirmed the government is also working on foreign exchange market reform. As digital finance grows, he said authorities plan to speed up opening South Korea’s currency market to more foreign investors. That follows last year’s MOVE to extend FX trading hours and allow overseas firms more access.

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