SEOUL, June 24 (Reuters) – The senior vice governor of South Korea’s central bank said it would be desirable to introduce stubcoins, which were first won at a gradual pace with strictly regulated commercial banks.
Stablecoins are a kind of cryptocurrency (usually pinned to USD at 1:1) designed to maintain a constant value, and are widely used by crypto traders to move funds between tokens and are beginning to be adopted by more and more companies.
“It would be desirable to allow high-level regulated banks to be issued (stablecoins acquired) gradually expand into the bank’s sector,” Ryoo Sang-Dai, senior lieutenant governor at the Bank of Korea (BOK), said at a press conference.
Ryoo said the introduction of Stablecoins could have a major impact on monetary policy and transaction settlement systems.
South Korea’s left-leaning president, Lee Jae Myung, has submitted an election pledge to allow businesses to issue WON-based stubcoins.
Ryoo also said rising home prices and household debt have become more important factors for central banks. This is currently a relaxation cycle. He added that interest rate cuts last month brought policy rates somewhere in the middle of the neutral range.
BOK will consult with major commercial banks to prepare a second pilot test of the Central Bank’s Digital Currency (CBDC) as the new administration’s policy stance becomes clearer, Ryoo said.
The central bank’s first pilot test ended next week after launching a joint project with an international settlement bank known as the central bank’s central bank to develop digital currency in late 2023.
Given the digital trend, authorities will speed up market reform efforts to open currency markets to foreign investors after extending trading hours by a year and allowing overseas participation, Ryoo said.