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South Korea’s Central Bank has declared its intention to restructure by incorporating a “cryptoassets department” as a surge of public sector activities related to stablecoins continues to gain traction.
The South Korean news source News1 reported that the Bank of Korea (BOK) has created a new division called the “Cryptoasset Department.”
The headquarters of the Bank of Korea, in Seoul, South Korea.
Cryptoassets Department: New BOK Division to Monitor Crypto Sector
The BOK also revealed that its Digital Currency Research Lab, which functions within its Financial Settlement Bureau, will be rebranded as the Digital Currency Lab on July 31. News1 noted:
“This seems to be an effort to highlight its role as a business unit.”
The bank further stated that it has restructured the responsibilities of the teams within the lab and will designate personnel to evaluate token usability.
The BOK mentioned that its Cryptoasset Team Department will function under its Financial Settlement Bureau.
This division will be tasked with overseeing the crypto market, including Korean won-pegged stablecoins and legislative issues.
The news outlet reported that analysts have viewed this reorganization as an “effort to more effectively address recent conversations regarding stablecoin issuance, while continuing its work on central bank digital currency (CBDC).”
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CBDC Plans on Ice?
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The BOK has recently paused its CBDC implementation plans, seemingly in direct reaction to the government’s stablecoin legalization initiatives.
The bank appears to consider CBDC-based deposit tokens to be equivalent to bank-supported KRW stablecoins.
BOK Governor Rhee Chang-yong remarked last year that deposit tokens are fundamentally “stablecoins issued by banks.” Rhee stated earlier this month:
“Regardless of whether we discuss a won stablecoin or a deposit token, we will require a digital currency in the future. We will thoughtfully evaluate whether it is preferable to gradually advance with a focus on the banking sector or to extend this to the broader private sector.”
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South Korean Stablecoin Regulation Incoming
The bank’s action follows shortly after the two largest political parties in the nation introduced stablecoin regulation proposals.
Both proposals suggest granting the Financial Services Committee extensive regulatory authority over the stablecoin sector.
Critics argue that this will significantly reduce the influence of the BOK. Additionally, the BOK has previously criticized plans for private sector stablecoin adoption.
It asserts that KRW-pegged coins could jeopardize Seoul’s capacity to implement effective monetary policy.
Several of the nation’s leading tech companies have already filed trademarks related to KRW stablecoins in anticipation of approval from Seoul.
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