[Contribution] Will we miss the golden time?: Won stablecoins, at the crossroads of ‘regulation’ and ‘nurturing’

Korean Won Stablecoin: Moving from 'Regulation' to 'Nurturing'

The private issuance of Korean won stablecoins has become an unstoppable trend. Of course, the concerns raised by the Bank of Korea regarding financial stability, monetary policy effectiveness, and seigniorage are valid and should be deeply listened to.

However, we should not prematurely cut the sprouts of innovation out of fear of risks. Considering the global regulatory trends, the speed of technological development, and the market's demand for financial innovation, we must now answer the question of 'how to wisely institutionalize and supervise' rather than 'whether to prohibit'.

Assuming rational regulation and supervision, we must promote private innovation and open a path for the entire society to enjoy its advantages. The key is to find the optimal balance point between 'essential safeguards' to prevent indiscriminate issuance and 'reasonable entry barriers' for financial innovation in South Korea. True innovation is born not on a desk, but through fierce market verification.

The Essence of the Global Stablecoin War: 'Trust' and 'Network'

In the global financial market, stablecoins have already become an essential tool for next-generation financial innovation. Most advanced countries, including the United States, are moving towards nurturing private stablecoins while managing risks.

Particularly, the essence of the ongoing global stablecoin war has significantly changed. While in the past, 'who is more decentralized' was important, now it has completely shifted to a battle of 'who is more trustworthy, more useful, and can build a broader network'.

Here, 'trust' does not simply mean technical security. It is about who the 'identifiable business entity' is that can take responsibility and solve problems when issues arise. This point must not be overlooked.

Fortunately, there are relevant cases domestically. There is the consortium blockchain 'Luniverse', and a messaging platform 'Touchstone' for interconnecting different stablecoins. The smooth communication between stablecoins based on different technologies is a prerequisite for the future stablecoin era and a foundation for Korean stablecoins to gain global competitiveness. This is because, as stablecoins spread, the existing US-centered financial order maintained through the SWIFT network could weaken, and this could be a 'window of opportunity' for us to propose a new alternative and build a new digital financial network.

I believe the ideal Korean won stablecoin model should be similar. Trustworthy financial institutions and companies form a consortium, discover and apply useful use cases that benefit society, and further deepen the ecosystem by connecting with global networks.

Reading Between the Lines of the Changing Bank of Korea's Stance

Within this flow, the Bank of Korea's position is subtly changing.

Initially: "Our CBDC-based deposit Token can replace stablecoins."
Recently: "Bank-centered stablecoins should be primarily allowed."
Currently (July): "Unanimous consensus among relevant institutions, including the Bank of Korea, is necessary at the issuance authorization stage."

This shows that the center of gravity of their stance has moved from 'complete opposition' to 'conditional permission', and now to 'securing strong supervisory authority'. It is interpreted as the Bank of Korea acknowledging the reality that it cannot ignore the trend of private stablecoins and demonstrating its will not to lose control and initiative in financial stability.

Social Consensus for the Future, Not Confrontation

Ultimately, the core of the debate surrounding private stablecoin issuance is not a binary opposition of pros and cons. Most concerns raised by the opposition assume risks that could occur in a 'lawless state without regulation'. In contrast, the proponents' logic focuses on the fact that these risks can be sufficiently managed and controlled through 'wise and specific regulation', and that the benefits from innovation would far outweigh the risks.

Therefore, our task is to lead a social consensus on 'what level and method of regulation' will build a 'safe and efficient stablecoin ecosystem'. On this path, a new future for South Korean finance will open up.

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