Latest news with #DigitalAssetBasicAct
The Star
3 days ago
- Business
- The Star
BOK chief says he is not against won-based stablecoins but has forex concerns
FILE PHOTO: Rhee Chang-yong, Governor of the Bank of Korea, participates in a panel titled 'How Should Central Banks Battle High Inflation?' at the 2023 Spring Meetings of the World Bank Group and the International Monetary Fund in Washington, U.S., April 14, 2023. REUTERS/Elizabeth Frantz/File Photo SEOUL (Reuters) -South Korea's central bank governor said on Wednesday he was not against issuing won-denominated stablecoins but had concerns about managing capital flows. "Issuing won-based stablecoin could make it easier to exchange them with dollar stablecoin rather than working to reduce use of dollar stablecoin. That in turn could increase demand for dollar stablecoin and make it difficult for us to manage forex," Rhee Chang-yong told a press conference in Seoul. Stablecoins, a type of cryptocurrency designed to maintain a constant value – typically pegged 1:1 to the U.S. dollar – are widely used by crypto traders to move funds between tokens, and are starting to be adopted by more and more companies. Regulators in many countries are skeptical about cryptocurrencies as they are seen as speculative and as competitors to national currencies. Rhee's comments come as South Korea's left-leaning President, Lee Jae Myung, is seen delivering on his election pledge to allow companies to issue won-based stablecoins. The ruling Democratic Party proposed earlier this month the Digital Asset Basic Act, designed to set up regulatory infrastructure needed to help local companies issue won-denominated stablecoins. President Lee appointed a former crypto firm chief, Kim Yong-beom, as his chief policy officer in his first week in office, further boosting speculation that the government would take action to allow issuance of stablecoins backed by the Korean won. Kim has previously served as vice chairman of the Financial Services Commission before becoming chief executive of Hashed Open Research, a think tank affiliated with crypto venture capital firm Hashed Ventures Inc. Governor Rhee has previously told reporters that allowing stablecoins to be issued by local companies, rather than the central bank, could significantly undermine the effectiveness of monetary policy and capital flow control. (Reporting by Jihoon Lee; Editing by Tom Hogue and Muralikumar Anantharaman)
Yahoo
10-06-2025
- Business
- Yahoo
South Korea's Ruling Party Wants to Allow Companies to Issue Stablecoins: Bloomberg
South Korean President Lee Jae-myung's Democratic Party submitted a bill to parliament that would allow qualifying companies to issue stablecoins, Bloomberg reported on Tuesday. The Digital Asset Basic Act is aimed at improving transparency and encouraging competition in cryptocurrency, Bloomberg said. Companies would be able to issue their own stablecoins provided they have at least 500 million won ($368,000) in equity capital and can guarantee refunds through reserves as well as receiving approval from the Financial Services Commission. Lee, voted in as president last week, made a number of promises to South Korea's crypto industry during his election campaign, appealing to the nation's 15 million crypto investors. Among them, he said the country should support a won-based stablecoin market "to prevent national wealth from leaking overseas," the Korea Herald reported. Stablecoins are tokens pegged to the value of a traditional financial asset, such as a fiat currency, with the U.S. dollar being comfortably the most prevalent. Their stability provides a counterweight to the volatility of cryptocurrencies like bitcoin BTC and ether ETH, allowing users to hold capital in digital assets without having to worry about wild swings in price. The sector, which is dominated by Tether's USDT, has experienced a surge in interest this year thanks to, among other factors, progress toward regulation of the sector in the U.S. The strength of the stablecoin sector has been highlighted in the last week by the strong performance of USDC issuer Circle's stock (CRCL) following its initial public offering (IPO). The shares more than quadrupled during the first three days of trading. In addition, market cap of the sector reached $250 billion for the first time.
Yahoo
10-06-2025
- Business
- Yahoo
South Korea's Ruling Party Unveils Plan to Allow Stablecoins
(Bloomberg) -- South Korea's new President, Lee Jae-myung, is moving quickly to deliver on his campaign pledge to allow local companies to issue stablecoins, giving a further boost to one of the world's most active digital-asset markets. Next Stop: Rancho Cucamonga! Trump Said He Fired the National Portrait Gallery Director. She's Still There. Where Public Transit Systems Are Bouncing Back Around the World NYC Mayoral Candidates All Agree on Building More Housing. But Where? US Housing Agency Vulnerable to Fraud After DOGE Cuts, Documents Warn Lee, a progressive leader who defeated his conservative rival in last week's presidential election, has been a vocal proponent of stablecoin adoption. On Tuesday, Lee's ruling Democratic Party proposed Digital Asset Basic Act, aimed at improving transparency and encouraging competition in the crypto sector. Under the act, South Korean companies can issue stablecoins if they have at least 500 million won ($367,876) in equity capital while ensuring that refunds are guaranteed through reserves. South Korea is already a hotbed for crypto activity. More than a third of the population, or around 18 million people, participate in digital-asset markets. On some days, trading volume on local crypto exchanges surpasses turnover on the Kospi and Kosdaq stock indexes. Stablecoins are cryptocurrencies pegged to another asset, typically the US dollar. They are gaining global momentum as regulatory frameworks develop. In the US, Congress is set to vote Wednesday on key stablecoin legislation, and President Donald Trump has identified the sector as a policy priority via executive order. South Korea's act also stipulates asset-linked digital assets, including stablecoins, must be approved by the Financial Services Commission, a text of the act released by the ruling party said. Stablecoin trading is surging in South Korea. Transactions involving USDT, USDC and USDS on five major domestic exchanges reached 57 trillion won in the first quarter, Yonhap News reported, citing Bank of Korea data. Still, Lee's initiative is facing some resistance from the central bank. Bank of Korea Governor Rhee Chang-yong warned last month that stablecoins issued by non-bank entities could weaken the effectiveness of monetary policy. He argued that the central bank should take the lead in regulating a won-pegged stablecoin. Read: South Korea Crypto Industry to Gain No Matter Who Wins Election The global financial industry is also taking note. Banks including Deutsche Bank and Santander, along with major tech firms, are exploring stablecoin issuance. Shares in the world's second-largest stablecoin issuer Circle have soared after its IPO last week. Read: Stablecoin Firm Circle Surge From IPO Hits 247% on Day Two (1) South Korea's push is fueling a rally in local digital-asset stocks. Shares of KakaoPay Corp. jumped as much as 18% on Tuesday, the highest since January 2024, on expectations Lee's administration will back a won-based stablecoin. Still, some analysts are cautious. 'The rally in Kakao-related shares is fundamentally unjustifiable, as any concrete benefit from Lee's stablecoin policy remains uncertain,' JPMorgan analysts Stanley Yang and Jihyun Cho wrote in a note. South Korea continues to bear the scars of the TerraUSD collapse in 2022, which wiped out $40 billion in value and remains a cautionary tale as the country re-engages with stablecoins. New Grads Join Worst Entry-Level Job Market in Years The SEC Pinned Its Hack on a Few Hapless Day Traders. The Full Story Is Far More Troubling Cavs Owner Dan Gilbert Wants to Donate His Billions—and Walk Again What America's Pizza Economy Is Telling Us About the Real One America Cast Itself as the World's Moral Leader. Not Anymore ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Crypto Insight
10-06-2025
- Business
- Crypto Insight
South Korea moves to legalize stablecoins with new crypto bill
South Korea's newly elected president Lee Jae-myung is fast-tracking his campaign promise to allow the issuance of domestic stablecoins, as his party has moved forward with a crypto bill. Lee's ruling Democratic Party proposed the Digital Asset Basic Act on Tuesday, aimed at improving transparency and encouraging crypto sector competition, Bloomberg reported. The bill stipulates that local companies can issue stablecoins with a minimum equity capital of 500 million won ($368,000). They must also guarantee refunds through reserves and get regulatory approval from the Financial Services Commission, the country's finance regulator. South Korean stablecoin trading is surging with transactions involving the leading US dollar stablecoins reaching 57 trillion won ($42 billion) on five main domestic exchanges in the first quarter, according to Bank of Korea data. The new legislation is expected to bolster such trades and boost one of the region's largest crypto markets, with more than a third of the population, or around 18 million people, reportedly participating. Lee works to fulfill election promises South Korea's opposition leader Lee was sworn in as president following a decisive snap election victory on June 3. In addition to his plans for a local currency stablecoin, Lee also advocated for South Korea's national pension fund to invest in Bitcoin and crypto, in addition to pledges to permit the launch of Bitcoin exchange-traded funds (ETFs) in the country. 'We need to establish a won-backed stablecoin market to prevent national wealth from leaking overseas,' he said during a policy discussion in May. Bank of Korea opposes stablecoin policy Lee's crypto ambitions are facing central bank opposition, with Bank of Korea Governor Rhee Chang-yong warning that non-bank stablecoins could weaken monetary policy effectiveness. The central bank argued that it should take the lead in regulating a local currency stablecoin. South Korean investors could still be burned from their investments in the multibillion-dollar Terra blockchain and its algorithmic stablecoin that was co-created by local Do Kwon, which collapsed in May 2022. South Korean crypto stocks react South Korea's crypto push is fueling a rally in local stocks such as mobile payment and digital wallet service KakaoPay, which has seen shares jump as much as 45% over the past five days, according to Google Finance. However, JPMorgan analysts Stanley Yang and Jihyun Cho said, 'The rally in Kakao-related shares is fundamentally unjustifiable, as any concrete benefit from Lee's stablecoin policy remains uncertain.' Source:
