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The Bank of Korea has announced its intention to play a proactive role in the development of government regulations on the use of cryptography in the country.
In its “2024 payment and payment report”, the bank plans to provide comments on the use of stables. This is following the announcement of the South Korea Financial Services Commission that it will start to write the second crypto law later this year.
The report highlights the trends and analysis of payments in the Korean payments sector for 2024, as well as the supervision activities of the Korean Bank and potential policies.
The central bank has determined that its contributions are essential to mitigate the potential monetary and financial risks associated with stablescoins. The Korean Bank has stressed in its report that a solid regulatory framework is important for stablecoins, as they can be used as a means of payment, unlike other digital assets.
They also added that if the stablecoins become a means of payment in Korea, this could negatively affect monetary policies.
The National Bank believes that Stablecoins are not as immune to volatility as some enthusiasts claim it and could introduce risks linked to cryptography to the financial ecosystem of South Korea.
In July 2024, South Korea introduced a law to regulate the use of cryptocurrency, tightening the rules for crypto exchanges. The government has now decided to create a complementary legal framework for the stablescoins, offering clearer directives on the token lists and fill its gaps in existing regulations.
The South Korean financial authorities should also impose sanctions on the exchanges of cryptography abroad operating without appropriate licenses.
With the growing involvement of South Korea in cryptographic regulations, in particular after significant global changes such as the presidency of Trump, the country is becoming more and more an important actor in cryptographic space. It will be interesting to see how the regulatory trajectory of South Korea is evolving in the years to come.
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