[Breaking! The Bank of Korea suddenly takes action, is the stablecoin about to change?]
Folks, today (May 12) the central bank dropped a big move! Just now, Ko Kyeong-cheol, head of the Bank of Korea's electronic finance team, announced at a financial law conference: From now on, all stablecoins backed by the Korean won must be monitored by the central bank from inception! This has caused a stir in the Korean crypto circle, as one in every three people in South Korea is currently trading cryptocurrencies, with the top five exchanges reaching a daily trading volume of up to $12.1 billion. This operation directly concerns the wallets of tens of millions of people!
The central bank is getting anxious: Is stablecoin taking a bite out of my cake?
Brother Ko directly fired shots at the meeting: 'Stablecoins seem stable, but they could overturn the entire financial system!' He pointed out that once stablecoins are widely used, monetary policy would feel like being splashed with cold water—if the central bank wants to raise interest rates to control inflation, people could simply bypass the policy using stablecoins, rendering the control ineffective. What's even scarier is that the sudden turmoil in the crypto market (like a sudden crash) could directly impact the traditional banking system through stablecoins, equivalent to opening a hole in the financial dam.
The Bank of Korea is not being alarmist. Just last month, in their report on payment systems, they explicitly warned: Stablecoins could become a highway for money laundering and capital flight. Imagine this: You buy Bitcoin with USDT in South Korea and then directly transfer it cross-border to an overseas account, completely bypassing foreign exchange controls—who can accept that?
Regulatory combination punch: Full control from birth to death.
This operation by the Bank of Korea can be described as 'steady, accurate, and ruthless':
1. Birth certificate system: All Korean won stablecoin issuances must first pass through the central bank's scrutiny; the adequacy of reserves and risk control measures must be disclosed to the central bank.
2. Transparency of reserves: You claim your stablecoin is pegged 1:1 to the Korean won? Fine, show the bank deposit certificate and government bond holdings; if you dare to play tricks, your license will be revoked.
3. Enhanced foreign exchange controls: For cross-border transactions involving dollar stablecoins, South Korea plans to refer to the practices of the EU and Japan, requiring reports for any transfer exceeding a certain amount, completely blocking loopholes for capital outflow.
More strikingly, the South Korean Financial Services Commission (FSC) has already initiated the legislative process and plans to introduce a dedicated regulatory framework for stablecoins in the second half of the year. By then, stablecoins listed on exchanges will have to disclose detailed information like listed companies, and it may even require stablecoin issuers to undergo regular audits.
Huge upheaval in the crypto market: Both retail investors and institutions are panicking.
This round of policy has turned the Korean crypto world upside down. Retail investors are starting to worry whether their USDT will suddenly be restricted from trading, while institutions are pondering: can we still happily use stablecoins for cross-border settlements in the future?
However, the South Korean government has also left a backup plan. On one hand, they plan to open corporate virtual asset accounts in three phases, first allowing professional investors to enter in the second half of the year to attract institutional funds; on the other hand, the Bank of Korea is vigorously advancing the CBDC (central bank digital currency) experiment, aiming to test peer-to-peer transactions by October 2025. In plain terms, my own digital currency is the favorite, and stablecoins can only serve as tools.
The world is watching South Korea: Can we copy this operation?
South Korea's recent actions can be described as 'textbook-level regulation'. The EU previously allowed financial institutions to issue stablecoins through the MiCA legislation, while Japan requires large stablecoin transactions to report foreign exchange data. South Korea, on the other hand, has directly embedded central bank regulation into the entire lifecycle of stablecoins, effectively controlling risks from the source.
For ordinary investors, investing in stablecoins in the future requires keen discernment: recognize projects backed by the central bank, and steer clear of those shady coins. After all, in South Korea, 18.25 million people have suffered due to cryptocurrencies; perhaps after this regulatory storm, the market can truly 'stabilize'.
Finally, let's emphasize: The actions of the Bank of Korea are fundamentally about defending the national currency sovereignty. As cryptocurrencies become increasingly rampant, central banks around the world can no longer sit idly by. Who will be the next to take action? Let’s wait and see!