Similar digital assets are capable of transferring control over the national currency to private issuers and strengthening capital outflow from the country, leading to 'currency chaos' and increased demand for US dollars.
'If we allow non-bank organizations to conduct payment settlements, the profit structure of banks will change significantly. There is a likelihood that the monetary chaos that existed in the country in the 19th century due to the circulation of various private currencies will be repeated,' explained Lee Chang Yong.
The head of the Central Bank reminded that at the end of the Joseon dynasty (1392–1897), several types of banknotes and coins issued by private individuals were in circulation. At that time, before the introduction of a unified national currency, Korea used coins denominated in muns, as well as money issued by merchants and communities — for such money, there were no unified standards of issuance and control.
To minimize risks, the head of the Bank of Korea proposed to allow the issuance of stablecoins only by banks under strict supervision of the Central Bank.