New research suggests that stability should be treated as both a payment tool and an investment asset that requires a comprehensive regulatory framework.
According to a recent report from Think Tank Hashed Open Research and Four Pillars, Stablecoin, tied to South Korea’s victory, could give South Korea a stronger foothold in the global Stablecoin race.
A report published on March 24 suggests that launching WON-based Stablecoin could potentially make digital transaction currency more practical while bridging the gap between the Korean crypto market and the international digital assets ecosystem.
According to the report, the introduction of KRW Stablecoin not only “helps in addressing structural inefficiencies in the Korean crypto market” but also “serves as the basis for the various fintech industries emerging from this ecosystem.” It makes an open research note that the high liquidity of Korea’s exchanges could benefit KRW’s ridiculous things over alternatives like the yen or euro.
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While promoting the use of winning stubcoins, the report also highlights concerns over the rapid rise of dollar-based stubcoins, such as Tether (USDT) and USDcoins (USDC), which could exacerbate capital outflows from the country. The report warns that capital outflow from the South Korean crypto market could grow into a larger problem, affecting the country’s financial stability and the strength of WON.
The report hashed open research seeking a dedicated regulatory framework for stubcoin, stating that these assets “have both payment instruments and investment assets characteristics and require a dedicated regulatory framework.” The report proposes to enable both banks and non-banks to issue stable ones under strict licensing and security requirements.
Furthermore, it proposes that foreign-issued KRW stubcoins should be regulated domestically, while foreign stables fixed to other Fiat currencies should only be permitted if they meet comparable regulatory standards.
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