Bank of Korea Governor Rhee Chang-yong has issued a cautionary note on the growing influence of stablecoins, warning that their widespread use could pose risks to the country’s banking system and foreign exchange stability. Speaking to local media, Rhee addressed the implications of introducing a Korean won-pegged stablecoin, emphasizing that such innovations, if not properly coordinated with financial regulators, could undermine the traditional banking sector.
“Active use of stablecoins could shift payment and settlement functions from the banking sector to non-banking entities.”
Rhee Chang-yong
His remarks come at a time when the new South Korean president has expressed clear support for launching a Korean won-stablecoin. The administration sees digital currencies as a strategic tool to modernize South Korea’s financial infrastructure, increase global competitiveness, and attract younger investors.
As of Q1 2025, a survey by the Korea Financial Investors Protection Foundation also found that over 45% of respondents in their 20s and 30s are actively trading digital assets, reflecting a strong demand for regulated digital finance tools.
Newly elected President Lee Jae-myung has pledged to legalize Korean won–backed stablecoins as part of his broader push to expand South Korea’s crypto sector.
He believes a domestic stablecoin market can help prevent capital outflows and support the local economy.
As the government balances innovation with financial stability, all eyes are now on how South Korea’s stablecoin strategy will take shape in the second half of 2025.
