Source: Cointelegraph
Original: “Korean Presidential Candidate Proposes Launching Won-Linked Stablecoin”
The leader of the South Korean Democratic Party, Lee Jae-myung, has proposed the creation of a stablecoin pegged to the won, aimed at preventing capital outflow and enhancing national financial sovereignty.
According to the Korea Herald, Lee emphasized in a recent policy discussion that a won stablecoin would allow South Korea to retain wealth domestically while reducing reliance on foreign-issued digital assets such as Tether (USDT) and USDC.
Currently, South Korean law prohibits the domestic issuance of stablecoins, forcing local exchanges to rely on dollar-based alternatives.
Reports indicate that in the first quarter of this year, the country's cryptocurrency exchanges recorded an outflow of 56.8 trillion won (approximately $40.8 billion), with nearly half related to foreign stablecoins.
"We must establish a stablecoin market backed by the won to prevent national wealth from flowing overseas," Lee stated.
This proposal is part of Lee's broader digital asset strategy, which includes legalizing spot cryptocurrency exchange-traded funds (ETFs).
Both Lee and his rival from the People Power Party, Kim Moon-soo, have pledged to support the introduction of spot cryptocurrency ETFs.
Source: Konstantin Tkachuk
Lee's campaign platform also calls for allowing national pension funds and other institutional investors to participate in cryptocurrency investments once price stability criteria are met.
To advance this goal, he proposed establishing a comprehensive monitoring system and reducing transaction fees to make cryptocurrencies more accessible under government oversight.
However, the stablecoin proposal has raised concerns among economists. Shin Bo-seong, a senior researcher at the Korea Capital Market Institute, warned that stablecoins could lead to an expansion of the money supply and transfer monetary control to private issuing entities.
"We cannot ignore the economic principles behind stablecoins. Stablecoins are essentially another form of banking, creating money out of thin air," Shin stated.
On May 13, the Democratic Party established a digital asset committee focused on formulating cryptocurrency policies and promoting industry development.
The committee held its first meeting at the National Assembly member's office in Seoul, emphasizing the importance of addressing regulatory uncertainty and handling stablecoin regulation.
The new committee joins existing similar organizations in South Korea, including the Virtual Asset Committee set to launch by the end of 2024 and another public-private cryptocurrency working group initiated by the Financial Services Commission (FSC) in 2022.
The Democratic Party also plans to introduce the "Basic Law on Digital Assets." This bill will create a legal framework for cryptocurrencies and stablecoins, requiring issuers to hold at least 50 billion won in reserves and obtain FSC approval.
Related: Genesis Files Dual Lawsuit to Recover $3.3 Billion from Digital Currency Group (DCG) and Its CEO
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