To effectively utilize the Korean won stablecoin for payments and remittances, there is a need to establish the Digital Asset Basic Law and refine regulations related to electronic financial transactions and anti-money laundering, experts argued. They emphasized that beyond setting issuance requirements, a regulatory framework governing circulation and payment processes, as well as systems to prevent illegal transactions, must be established for commercialization to occur.
The Democratic Party's Artificial Intelligence (AI) Financial Economy Promotion Team held a seminar titled 'Realizing Stablecoin Innovation: Challenges After the Digital Asset Basic Law' on November 10 at the Financial Investment Education Institute in Yeouido, Seoul, in collaboration with the Credit Finance Association and the Korea Fintech Industry Association.
Ahn Do-gul, a member of the Democratic Party's AI Financial Economy Promotion Team, stated that the government's proposal for the Digital Asset Basic Law will soon be submitted to the National Assembly. He stressed, "We must quickly establish the basic law and push for follow-up legislation necessary for the issuance and circulation of stablecoins."
Ahn noted, "For the actual issuance and circulation of stablecoins to be possible, related laws such as the Electronic Financial Transactions Act and the Specific Financial Information Act must also be refined. As the use of stablecoins rapidly expands in the global market, discussions are needed to develop new business models and form a market domestically."
Stablecoins are digital assets designed to be pegged to the value of fiat currencies such as the Korean won or the U.S. dollar. During the seminar, participants discussed ways to enhance the efficiency of payments and remittances through the Korean won stablecoin, as well as strategies to manage risks arising during the circulation process.
The first presenter, Song Min-taek, a professor at Hanyang University, explained that the Korean won stablecoin could reduce the constraints of the existing financial network and serve as a foundation for creating new financial services.
Song stated, "Stablecoins can reduce the temporal and spatial constraints of the existing financial network and enhance the efficiency of payments, remittances, and settlements. They enable 24/7 transactions and cross-border fund transfers, and can expand into new financial services such as AI-based automatic payments."
Concerns were raised about the need to control risks in the circulation process while expanding the scope of use. The second presenter, Jeong Young-ki, a lawyer at Kim & Chang, warned that the high liquidity and convenience of cross-border movement of stablecoins could be exploited for money laundering and other illegal transactions.
He pointed out that regulating only the issuance stage would not be sufficient to control risks arising from peer-to-peer (P2P) transactions or overseas circulation. He explained that anti-money laundering systems must be operational not only for the issuer's requirements and obligations but also throughout the transaction process after issuance.
Jeong emphasized, "The capability for anti-money laundering is a prerequisite for the commercialization of the Korean won stablecoin. Only a reliable Korean won stablecoin can cross borders."
* This article has been translated by AI.
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