BOK's two-day conference opens with warnings over stablecoins and digital money shift

By Kim Yeon-jae Posted : June 1, 2026, 13:50 Updated : June 1, 2026, 13:50
Bank of Korea governor Shin Hyun-song (left) and European Central Bank executive board member Isabel Schnabel speak at a conference in Seoul on June 1, 2026. Courtesy of Bank of Korea
SEOUL, June 01 (AJP) - The spread of stablecoins could reinforce the dominance of the U.S. dollar and weaken monetary sovereignty in other economies, European Central Bank executive board member Isabel Schnabel warned on Monday at the Bank of Korea's annual conference in Seoul on Monday.

At the two-day conference held under the theme "Central Banks and the Future of Money" at the central bank's annex hall, Schnabel said in her keynote speech that the rapid spread of stablecoins could strengthen the global role of the U.S. dollar at the expense of other currencies.

Her warning was followed by opening remarks from BOK Governor Shin Hyun-song, who stressed that money is not simply a technological tool but a social institution built on trust.

"Currency is not merely about technology, but about how our society coordinates economic activities," Shin said, adding that the central question for the future monetary system is how trust in money can be preserved.
 
Bank of Korea governor Shin Hyun-song speaks at a conference in Seoul on June 1, 2026. Courtesy of Bank of Korea
Stablecoins, which are digital tokens designed to maintain a stable value by being pegged to assets such as fiat currencies, still account for a relatively small share of global financial assets. But their use has grown quickly, and most stablecoins currently in circulation are pegged to the U.S. dollar.

"The dollar's dominance would be reinforced, not necessarily owing to stronger economic fundamentals but due to network effects, scale and first-mover advantages," Schnabel said.

She warned that the trend could have serious implications for countries with weaker monetary credibility, where households and firms may increasingly shift into dollar-based stablecoins.

Such a shift could make it harder for domestic central banks to transmit monetary policy to the real economy, weakening the role of local currencies as policy anchors.

Schnabel said the risk is not limited to emerging markets. Even regions with strong monetary credibility, including the euro area, could face long-term consequences if dollar-based stablecoins expand the use of dollar invoicing and global dollar liquidity holdings.

From a European perspective, she warned, such a trend could restrict the euro's role in tokenized finance and in the international monetary system.
 
European Central Bank executive board member Isabel Schnabel speaks at a conference in Seoul on June 1, 2026. Courtesy of Bank of Korea

The first day of the conference will focus on financial stability, digital currency and central bank communication, with presentations by Tobias Adrian of the International Monetary Fund, Markus Brunnermeier of Princeton University and Michael Weber of Purdue University and ESMT Berlin.

The second day will include a special lecture by Robert Townsend of the Massachusetts Institute of Technology, sessions on the history of central banking and artificial intelligence, and a final panel discussion on "The Role of Central Banks in a New Digital Economy."

The BOK is livestreaming the opening session and the second-day panel discussion on its official YouTube channel.

Kim Yeon-jae

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