Korean Won Stablecoin May Reduce Capital Outflow Concerns

Lee Seung-ho, a member of the Macroeconomic Finance Division at the Korea Capital Market Institute, stated that the Korean won stablecoin could alleviate concerns about capital outflows resulting from the spread of dollar stablecoins. At a seminar held in Yeouido, Seoul on the 2nd, he explained that the Korean won stablecoin could reduce the possibility of capital outflows by replacing dollar assets that go overseas. He also added that considering the structure of stablecoins, price fluctuations in the digital asset market are unlikely to lead to exchange rate fluctuations. He emphasized that if stablecoins are used for cross-border payments, changes to the existing foreign exchange transaction system would be necessary, advocating for a restructuring of the foreign exchange management system to fit the digital environment. The establishment of a monitoring system for stablecoin transactions was also highlighted as an important task. He assessed that the spread of stablecoins could have a positive impact on the internationalization of the Korean won and stated that after establishing a reporting and monitoring system for digital asset transactions, stablecoins should be recognized as a means of cross-border payment.

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