On the eve of Circle’s visit to South Korea, the Bank of Korea urges the National Assembly to regulate US dollar stablecoins

According to Jinse Finance, Han Ji-hoon – representing the Bank of Korea (hereinafter referred to as “BOK”) – has urged the National Assembly to strengthen regulations on US dollar stablecoins, citing concerns that their widespread adoption is threatening South Korea’s monetary sovereignty. Notably, this call comes as representatives from Circle, the primary issuer of the USDC stablecoin, are set to hold a series of meetings with senior executives from Korean commercial banks. The BOK emphasized, “The government and the National Assembly urgently need to revise relevant laws such as the Foreign Exchange Transactions Act.” The BOK is particularly concerned that the proliferation of US dollar stablecoins could trigger a phenomenon of “currency substitution,” thereby negatively impacting the effectiveness of monetary policy and monetary sovereignty. In addition, the BOK assessed, “The outflow of US dollars through stablecoins could also exacerbate instability in the foreign exchange market.”