South Korean Economists Warn of Risks in Won Stablecoin Rollout
South Korean economists urge caution on won stablecoin legalization, highlighting risks of coin runs, money laundering and regulatory gaps. A Korean Economic Association survey shows 37.1% support won stablecoin for payment innovation, while 30% question its necessity. 58.1% favor a hybrid issuance by banks and qualified non-bank institutions; 35.5% support bank-only issuance. Experts recommend gradual implementation via pilot programs, rigorous stress tests and robust oversight to safeguard financial stability. Proper regulation could reduce transaction costs, speed up settlements, boost financial inclusion and strengthen cross-border trade. Clear frameworks and independent oversight are essential to balance innovation and security in South Korea’s digital currency strategy.
Neutral
While the cautionary stance highlights significant risks, it signals a measured regulatory approach that could prevent systemic shocks and pave the way for stablecoin adoption. The balanced debate between innovation and security is likely to maintain market stability in the short term, as traders await clarified frameworks. In the long term, successful pilot programs and robust oversight can unlock the won stablecoin’s potential to enhance transaction efficiency and cross-border payments. Similar debates around other national stablecoins, such as Singapore’s U.S. dollar–pegged stablecoin trials, took a neutral market stance until clearer regulations were enacted.