Bank of Korea: Considering allowing domestic institutions to issue virtual assets, but stablecoins remain controversial

According to Jinse Finance, Bank of Korea Governor Rhee Chang-yong stated at the Asian Financial Forum in Hong Kong that, in light of market pressures, South Korea plans to allow residents to invest in virtual assets issued overseas. At the same time, the country is also considering establishing a new registration system to permit domestic institutions to issue virtual assets. Rhee Chang-yong also mentioned that won-denominated stablecoins will mainly be used for cross-border transactions, while tokenized deposits will be more focused on domestic payments. However, he emphasized that stablecoins remain controversial, South Korea's fast payment system is highly developed, and retail central bank digital currency (CBDC) does not offer significant advantages. The Bank of Korea will carry out multiple pilot projects and will also launch tokenized deposits and wholesale CBDC to maintain a two-tier system.