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South Korea’s Central Bank Warns of Risks in Private Stablecoin Issuance

South Korea’s Central Bank Warns of Risks in Private Stablecoin Issuance

Author:

Global Cryptocurrency

Published:

2025-10-28 16:59:02

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BTCCSquare news:

South Korea’s central bank has issued a stark warning about the fragility of privately issued stablecoins, emphasizing that trust—not technology—is the bedrock of currency stability. The Bank of Korea (BOK) highlighted the inherent risks of depegging, citing catastrophic failures like Terra/Luna and USDC’s temporary collapse during the Silicon Valley Bank crisis as cautionary tales.

The BOK urged traditional financial institutions to take the lead in stablecoin issuance, arguing that private operators often lack the institutional safeguards and reserve adequacy to maintain pegs. Project Hangang, the bank’s pilot for digital deposit tokens, was framed as a model for balancing innovation with systemic stability.

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