Separately Manage Stablecoins from Other Virtual Assets: Korea Institute of Finance Suggestion

The Korea Institute of Finance has suggested that the issuance and distribution of stablecoins should be managed separately from virtual assets in a new statement.

"As the issuance and distribution scale of stablecoins grows, the need for institutional supplementation is also increasing," said Jeong-Doo Lee, Senior Research Fellow at the Korea Institute of Finance, at the ‘Capital Market Activation and Financial Stability’ conference. The conference was held on the 13th at the Bank Hall in Myeong-dong, Seoul, and was organized by the Korean Economic Association, Korea Institute of Finance, and Capital Market Research Institute.

“Stablecoins issued in foreign countries without a domestic legal enforcement link to the issuer can leave domestic users vulnerable to bankruptcy risks. It is urgent to supplement the monitoring system to prevent illegal transactions,” said Lee.

This is not limited to the domestic scope, and joint efforts are needed at the level of the global Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) systems, he added.

“Regarding the domestic distribution of stablecoins pegged to foreign currencies like the dollar, we need to check for loopholes in foreign exchange management and actively discuss to prevent regulatory gaps.”