Opinion: Introducing a Korean Won Stablecoin Requires Allocation of Short-term Government Bonds and Improvement of Relevant Regulations

According to a report by Jinse Finance, Kim Pil-gyu (phonetic), Senior Research Fellow at the Korea Capital Market Institute, stated at the "Stablecoins and Short-term Government Bonds" seminar held in Yeouido, Seoul on the 11th: "Proper foundational preparations should be made for the introduction of a Korean won stablecoin," and put forward the above viewpoint. He pointed out that if a Korean won stablecoin is introduced, reserve assets would be needed to enhance its payment stability and store-of-value function, and short-term government bonds—which are used to cover the government's short-term funding gaps—can serve this purpose. In particular, he explained that short-term government bonds carry relatively low risk in the event of sharp interest rate fluctuations or changes in market demand, and compared to long-term government bonds, their interest rates are relatively lower, which helps improve the efficiency of fiscal funding and its utilization.