In brief
- In a report Monday, the Bank of Korea challenged the notion that technology alone can ensure currency stability.
- The central bank cited depegging risks, noting that major stablecoins like USDC fell to $0.88 during Silicon Valley Bank’s 2023 collapse.
- Meanwhile, South Korean companies are advancing won-pegged stablecoin pilots, including BDACS’s successful KRW1 test on the Avalanche blockchain.
South Korea’s central bank has sounded the alarm on won-denominated stablecoins, warning private issuers lack the institutional trust required to maintain stable currency and urging traditional banks to take the lead instead.
The Bank of Korea (BOK) released a report Monday outlining major risks associated with won-pegged stablecoins, comparing them to historical currency failures from America’s mid-19th-century free-banking era to Korea’s own Dangbaekjeon crisis under King Gojong.
“Currency operates not on technology, but on trust,” the report says, challenging proponents who believe blockchain innovation alone can
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Author: Vismaya V
