# South Korean Lawmaker Proposes Stablecoin Integration to Safeguard Against Capital Outflow Risks

Min Byung-deok, a lawmaker from South Korea’s Democratic Party, has highlighted the pressing need for a Korean won-based stablecoin to combat capital outflows in the digital finance era. He called on the Bank of Korea to accelerate the establishment of the essential technical and institutional structures to shield the nation’s foreign exchange market from potential disruptions.

Min shared his perspective via Facebook on October 21, stating, "In today’s digital world, converting Korean won into U.S. dollar stablecoins requires just a few taps on a smartphone. The reality of digital capital movement demands a robust technological response to maintain control." He likened the proposed Korean won stablecoin to a “modern-day fortress,” designed to protect domestic liquidity as global financial systems shift toward digitization.

# Risks of Foreign Stablecoin Domination in Domestic Economy

Min cautioned that delaying the development of a Korean won-based stablecoin could accelerate the penetration of foreign-denominated global stablecoins within South Korea’s economy. He emphasized the growing risks in a financial landscape where currency conversion costs are no longer a barrier, enabling rapid digital transfers of capital overseas.

“Preventing the creation of a Korean won stablecoin won’t stop capital outflows in an open digital financial environment,” he explained. “What’s urgently needed are policies and infrastructure capable of effectively regulating and managing these flows.” Min warned that ignoring this challenge risks South Korea losing control over its monetary sovereignty in the long term.

# Critique of the Bank of Korea’s Cautious Approach

Min criticized the Bank of Korea for its conservative stance on introducing Korean won stablecoins. He argued that the central bank has focused disproportionately on potential risks while neglecting proactive measures to address structural vulnerabilities. "Capital outflow pathways already exist; pretending they don't won't resolve the issue," Min asserted, urging the central bank to adopt a forward-looking mindset.

The lawmaker acknowledged concerns such as increased foreign exchange demand and disruptions to monetary policy but argued that these risks are manageable with existing technologies. He pointed to operational solutions such as Know-Your-Customer (KYC) protocols, anti-money laundering (AML) systems, and whitelist mechanisms for verified wallet addresses. "These tools are already functional and effective in mitigating risks,” Min explained, urging the Bank of Korea to leverage these advancements to fortify its position.

# Building a Resilient Digital Finance Infrastructure

Min called for the Bank of Korea to move beyond expressing concerns and instead implement comprehensive policy frameworks suited to the digital asset age. “We need infrastructure capable of real-time monitoring and responding to invisible capital flows, which the government currently struggles to manage,” he said. Min also proposed expanding foreign exchange reserve evaluation methods and statistical systems to account for emerging digital assets, viewing this as vital for long-term economic resilience.

Furthermore, Min advocated for developing a domestic ecosystem of digital wallets and a blockchain-powered payment network backed by the Korean won. Such initiatives could act as a natural safeguard against capital outflows, fostering a secure ecosystem for both individuals and businesses while preserving monetary stability.

By addressing these critical concerns, the lawmaker emphasized that South Korea has an opportunity to shape forward-thinking policies that strike a balance between innovation and financial stability. Min’s call to action underscores the urgency for the nation to strengthen its position amid the accelerating digitization of global finance, ensuring its economy remains resilient and competitive in the modern era.

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