Stablecoin-sceptic BIS exec set to become new South Korean central bank boss

South Korea’s incoming central bank chief is a crypto-sceptic who could derail industry leaders’ and lawmakers’ hopes of launching won-pegged stablecoins.

So say media outlets in the East Asian nation, after President Lee Jae-myung nominated the Bank for International Settlements’ Monetary Economy Bureau chief Shin Hung-song for the governorship of the Bank of Korea on March 22.

“Won-denominated stablecoins are a shortcut to effectively neutralising existing foreign exchange regulations,” Shin said in August, South Korean news agency Yonhap reported. “By exchanging stablecoins for dollar-denominated cryptocurrencies on blockchain protocols, [South Korea] could open a channel for capital outflow.”

Some of South Korea’s biggest, stablecoin-keen firms have been left in the lurch for months as government officials talk up imminent stablecoin legislative developments.

Pre-election promises

Shin “will step back from his duties with immediate effect” following his selection as BOK nominee, the BIS wrote in a statement.

Observers are waiting to see if Shin will change his tune on stablecoins after taking the helm at the BOK, Yonhap wrote.

Lee made won-pegged stablecoin issuance a key manifesto issue ahead of his election last year. But so far, the BOK has resolutely stood in the way of his governing party’s attempts to launch legislation.

Unnamed industry insiders said it was “a matter of great interest” to see what stance he would take on stablecoins.

A BIS report, published last year, warned that “stablecoins do not fulfil the role of stable currency.”

“Due to a lack of regulation, they could pose risks to financial stability and monetary sovereignty,” the report’s authors wrote.

South Korea’s top tech firms want to issue won-denominated coins to help them boost cross-border trade.

But the BOK says that allowing them to do so could undermine its efforts to control fiscal policy.

Crypto market movers

• Bitcoin is trading at $68,306 on Sunday, down by over 3% in the past 24 hours.
• Ethereum prices have fallen to $2,073 in the past day, a 24-hour drop of almost 4%.

What we’re reading

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Tim Alper is a News Correspondent at DL News. Got a tip? Email him at [email protected].