{"id":90393,"date":"2025-10-28T21:15:16","date_gmt":"2025-10-28T19:15:16","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=90393"},"modified":"2025-10-28T20:20:20","modified_gmt":"2025-10-28T18:20:20","slug":"south-koreas-central-bank-warns-of-stablecoin-deppegging-risks","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/south-koreas-central-bank-warns-of-stablecoin-deppegging-risks\/","title":{"rendered":"South Korea’s Central Bank Warns of Stablecoin Deppegging Risks"},"content":{"rendered":"

The Bank of Korea (BoK) has released a report<\/a> expressing concerns over the risks of stablecoins losing their peg, particularly those denominated in won.\u00a0<\/p>\n

The central bank noted that private issuers lack the institutional trust necessary to maintain the stability of these coins. Hence, the regulator urges traditional banks to take the lead.\u00a0<\/p>\n

The risks highlighted by the BoK are compared to historical currency failures, dating back to the free banking era in the United States in the mid-19th century. The primary concern is the depegging of “stablecoins,” where the exchange rate deviates from the underlying asset.\u00a0<\/p>\n

The report mentions the collapse of the Terra ecosystem<\/a>. Central bank representatives noted that the project’s algorithmic stablecoin “collapsed within days, causing countless investors to lose their assets overnight.”<\/p>\n

According to BoK’s observations, even leading coins like Circle’s USDC can lose their peg. During the American banking crisis of 2023, the coin fell<\/a> below $0.9.<\/p>\n

Concerns about non-dollar stablecoins with limited circulation are “particularly serious,” the central bank emphasized.\u00a0<\/p>\n

Despite the warnings, BoK “does not intend to stifle innovation” but aims to ensure investor safety.\u00a0<\/p>\n

\n

“When discussing won-denominated stablecoins that aspire to be a new currency, the first question should not be ‘is the technology feasible?’ but ‘is trust possible?'” the report states.<\/p>\n<\/blockquote>\n

The regulator believes private issuers should have a high level of “publicness” and establish institutional mechanisms to compensate for damages in case of a peg break.\u00a0<\/p>\n

In April 2025, BoK announced<\/a> its intention to “actively participate” in creating legislation to regulate stablecoins.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Bank of Korea has released a report expressing concerns over the risks of stablecoins losing their peg, particularly those denominated in won.\u00a0<\/p>\n","protected":false},"author":1,"featured_media":90394,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"","_short_excerpt_text":"BoK warns of stablecoin depegging risks, urges banks to lead.","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[36,974,807],"class_list":["post-90393","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-regulation","tag-south-korea","tag-stablecoins"],"aioseo_notices":[],"amp_enabled":true,"views":"156","promo_type":"1","layout_type":"1","short_excerpt":"BoK warns of stablecoin depegging risks, urges banks to lead.","is_update":"","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/90393","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/comments?post=90393"}],"version-history":[{"count":1,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/90393\/revisions"}],"predecessor-version":[{"id":90395,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/90393\/revisions\/90395"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/90394"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=90393"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=90393"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=90393"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}