Korea Central Bank Stresses Regulation of Stablecoins Over Money Laundering Fears

The Bank of Korea has emphasized the importance of regulating stablecoin issuers due to concerns over money laundering risks.

The central bank has reiterated its position that only licensed commercial banks should be authorized to issue won-denominated stablecoins, citing financial stability risks.

This decision comes after a recent incident at Bithumb, a South Korean cryptocurrency exchange, where $40 billion worth of 'ghost' Bitcoin was incorrectly transferred to clients. The error has heightened scrutiny of the country's digital-asset market, which has experienced rapid growth in recent years and has attracted significant retail participation.

The Bank of Korea's caution is aimed at maintaining financial stability and preventing potential risks associated with unregulated stablecoin issuers.