“Money runs on trust, not technology.” — Bank of Korea

Bank of Korea recently released a timely 151 page report on stable coins and CBDC, along with a 36 minute youtube video that goes through the key points of this report.

Following is a quick summary of the report and youtube video, if you are interested do try the youtube video(there is English audio option!)

💡 “Money runs on trust, not technology.” — Bank of Korea

The Bank of Korea’s latest report offers much insight on stablecoins — emphasizing that progress in digital finance must balance innovation with public trust.

While stablecoins enable 24/7 issuance and programmable payments, the report warns that they could shift the control of money from public institutions to private entities.

If left unchecked, this could threaten financial stability, consumer protection, and even the effectiveness of monetary policy.

Key concerns highlighted:

• Stability risk: Even major stablecoins like USDT and USDC have temporarily lost their pegs. Non-USD stablecoins face even higher volatility.
• Coin runs: Redemption rushes can occur faster and at greater scale than traditional bank runs.
• Regulatory blind spots: Central banks lack direct intervention tools when problems occur outside the banking perimeter.
• Financial-industrial separation: Large tech firms issuing their own coins could create monopolistic ecosystems.
• Policy impact: Large-scale issuance may influence short-term interest rates and weaken monetary control.

To address this, the Bank proposes a bank-led stablecoin model, supported by strict capital and foreign-exchange regulations.
Its ongoing Project Han River explores the use of deposit tokens — blockchain-based representations of bank deposits that maintain transparency and programmability while ensuring regulatory compliance.

In essence, the report argues that sustainable innovation in money requires the same foundation that has always supported trust in currency: clear accountability, sound institutions, and prudent oversight.

To think more about

On Linkedin I also see many experts voicing concerns on the central bank and other regulators in general being too circumspect while the clock is ticking. Which also has point considering that on 30 Oct 2025, KRWQ was launched by IQ in partnership with Franx.
(article: https://www.prnewswire.com/news-releases/krwq-the-first-korean-won-stablecoin-on-base-302599239.html)

Full report in Korean

디지털 시대의 화폐, 혁신과 신뢰의 조화: 원화 스테이블코인의 주요 이슈와 대응방안 | 지급결제 조사연구(상세) | 조사연구 | 뉴스/자료 | 한국은행 홈페이지

한국은행 BANK OF KOREA