South Korea’s central bank, the Bank of Korea (BOK), is making a big move into crypto regulation. They’re not just researching anymore; they’re taking action.
A New Crypto Lab is Born
The BOK has created a brand new “digital currency lab” unit within its Financial Settlement Bureau. This team will focus on digital tokens, especially stablecoins pegged to the South Korean won, and the rules surrounding them. They’re also renaming their existing Digital Currency Research Lab and shifting staff to focus on testing these tokens.
What the New Team Will Do
This new crypto team will be keeping a close eye on things: tracking token prices, market trends, and legal changes. They’ll test how these tokens work in payments and settlements, and see how they might affect regular bank accounts and lending. The main goal is to identify risks early and advise policymakers.
Stablecoin Bills Heat Up
This move comes right after South Korea’s two biggest political parties proposed new laws on stablecoins. These bills would give the Financial Services Commission a lot of power to regulate stablecoin issuers. While supporters say this will protect consumers and encourage innovation, critics worry it could reduce the BOK’s control over monetary policy and interfere with interest rate decisions.
CBDC Plans on Hold (For Now)
Interestingly, the BOK recently paused its own central bank digital currency (CBDC) project, called Project Han River. The governor explained that bank deposit tokens are quite similar to stablecoins, and the bank needs to figure out the best way forward – whether to focus on a bank-led launch or a broader private sector model. The plan is to start with banks and then possibly expand to fintech companies.
Tech Giants Waiting in the Wings
Several major South Korean tech companies have already trademarked won-pegged coins, clearly waiting for the legal framework to be in place. If the stablecoin bills pass, we could see big players in e-commerce and messaging launching their own tokens, creating new payment systems and loyalty programs. However, this could also draw deposits away from traditional banks, a concern the BOK is addressing with a cautious, phased approach.