BOK governor says stablecoins cannot fully substitute fiat currencies

During a parliamentary audit, Rhee Chang-yong, the Governor of the Bank of Korea, expressed skepticism about the potential of stablecoins to fully substitute traditional currencies, as reported by SBS Biz. He highlighted the risks of stablecoins, particularly issues of mismanagement, despite their pegging to stable assets like the U.S. dollar. Governor Rhee stressed the need for discussions with the government about integrating stablecoins into the existing financial framework, noting that this matter intersects with the Foreign Exchange Transactions Act. He also mentioned ongoing conversations with other central banks about central bank digital currencies (CBDCs), explaining that CBDCs are being considered as significant, albeit not perfect, alternatives to stablecoins. Governor Rhee anticipates a growing demand for CBDCs as programmable money.