South Korea’s Central Bank Wants to Oversee Stablecoins
In response to requests, the country is proposing regulations for the issuance of stablecoins.
According to a report the Bank of Korea (BoK) released, they want to start monitoring stablecoins. The Bank reports that stablecoins need stricter regulation than other digital assets because they have the ability to disrupt financial stability.
The BoK’s report echoes the concerns of jurisdictions across the world, who are all drawing up proposals to regulate stablecoins.
The report points out that stablecoin issuers should be required to have an adequate level of assets in reserve, so the risk of digital assets is lessened.
The government published a list of requirements for crypto-assets businesses. Those who want to operate will need to be registered and authorized and must also be subject to regular external audits.
Digital currency needs to be regulated because it has an issuance structure and market system that are different from securities and fiat currencies. With these differences, existing regulations become difficult to employ, as the report said.
Due to a disagreement about the national budget, the country’s politicians have not been able to form a comprehensive regulatory framework for crypto assets. Until they’re able to come to an agreement, all discussions on crypto-related bills have been stalled.
Since the collapse of Terraform Labs, South Korea’s policymakers have been taking a closer look at the crypto industry.