South Korean Central Bank Proposes Restricting Won-Backed Stablecoin Issuance to Licensed Banks

Background and Proposal

South Korea's central bank recently suggested to regulators that the issuance of won-backed stablecoins should be limited to licensed commercial banks. This move aims to address growing financial risks associated with virtual assets.

Money Laundering Risks and Financial Stability

The bank highlighted that stablecoins issued by non-bank entities could pose potential threats related to money laundering and illegal financing, endangering the broader financial system.

Future Regulatory Implications

As South Korea continues to develop its regulatory framework for cryptocurrencies and stablecoins, this proposal could significantly influence future policy directions.