Minchi 🪴
@minchi
In my personal time, I have been researching Central Bank Digital Currencies since early 2023 And there has been some interesting developments re: the debate of Stablecoins vs. CBDC in South Korea Here is a brief update summarized: -The Bank of Korea has once again expressed a negative stance on stablecoins, warning that they could negatively impact the central bank's policy execution in areas such as monetary policy, financial stability, and payment and settlement.
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Minchi 🪴
@minchi
- On the other side, pro-stablecoin industry participants argue that if a Korean won-pegged stablecoin is 100% reserve-based and the audit system is transparently operated, then bank runs or peg collapses could be structurally prevented.
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Minchi 🪴
@minchi
- The Bank of Korea's CBDC pilot (Project Han River), which has been running since April, has been temporarily suspended as complaints from participating commercial banks have increased. Why? Because banks realized that the introduction of a CBDC allocates more power to the central bank, reducing their profitability and business viability.
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Minchi 🪴
@minchi
- The newly elected President of South Korea has been keen on introducing won-based stablecoins, as rising demand for dollar-backed stablecoins (i.e., USDC) could lead to capital outflows.
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Minchi 🪴
@minchi
- According to the Bank of Korea, trading volume of dollar-pegged stablecoins (USDC, USDT) on Korea's five major CEXs (Upbit, Bithumb, Korbit, Coinone, and Gopax) reached $41.6B in Q1 of this year, which is 3x the volume from Q3 2024.
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Minchi 🪴
@minchi
The debate is ongoing and I will be updating here as policies solidify. Also, curious to learn how the CBDC vs. stablecoin debate is unfolding in other countries!
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