ChainCatcher Message, Han Ji-hoon - The Bank of Korea (hereinafter referred to as 'BOK') urges the National Assembly to strengthen regulation of US dollar stablecoins, citing that their widespread adoption is threatening South Korea's monetary sovereignty. Notably, this call comes as representatives from Circle, the issuer of the major US dollar stablecoin USDC, are about to engage in a series of talks with senior executives from South Korean commercial banks.

The BOK emphasizes: 'The government and the National Assembly urgently need to amend relevant laws such as the Foreign Exchange Transactions Act.' The BOK is particularly concerned that the proliferation of US dollar stablecoins may trigger a 'currency substitution' phenomenon, thereby negatively impacting the effectiveness of monetary policy and monetary sovereignty. Furthermore, the BOK assesses that 'dollar outflows through stablecoins may also exacerbate instability in the foreign exchange market.'