Speaking to the Committee on Planning and Finance of the National Assembly, Lee Chan Yong recognized the need to have stablecoins so that in the future, a currency with software functions would be used in the future. However, the introduction of stabilcoins in the financial market should take place gradually, in compliance with security measures, the head of the Bank of Korea agreed.
To prevent money laundering through cryptocurrencies, stablecoins should be issued by banking organizations using the “Know your client” (KYC) procedure to confirm the personality of users. If stablecoins are produced by large technological companies that are not related to banking, the financial system can change unpredictably, and for the worse, whether Chan Yong believes.
The official described the situation where banks would have limited payment functions without the possibility of issuing loans. This would lead to the outflow of deposits and a decrease in the profitability of banks. As a result, the financial market would not be able to maintain economic activity in the country, assured the manager of the Central Bank. He is concerned that stablecoins attached to Vena can be produced without restrictions, so wealthy Koreans will transfer capital abroad through foreign crypto -rhizas like Binance.
The official doubted the demand for stablecoins provided by won. According to his calculations, 99% of world transactions associated with stabiblcoins are carried out in US dollars. Lee Chan Yong does not believe that with the appearance of stablecoins tied to local currency, the demand for dollar stabilcoins will decrease. In addition, in other countries, stablecoins are used mainly for trading in digital assets, however, in South Korea, virtual assets are not allowed, the manager of the Central Bank explained.
The Commission on the Financial Services of South Korea (FSC) began the development of a bill on the regulation of stablecoins, where the requirements for issuers for the release of tokens, the management of the pledge and internal risk control will be set out.
Source: Bits
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