The nominated chairperson for the Financial Services Commission of South Korea, Lee Eok-won, linked the possibility of a won denominated stablecoin to the creation of a “national blockchain”. This proposal combines a critical view of volatile cryptocurrencies with openness toward stable digital instruments – it restarts the debate about monetary control and decentralization.
Context and statements
Lee has noted that traditional cryptocurrencies show much change and danger for regular people who invest plus for pension funds. This view places him with those who are careful. At the same time, he showed a wish to support won linked stablecoins if there are clear rules. Publications such as Cointelegraph and local reports record the statements; they also record the possibility that authorities and banks will try initiatives for a digital currency with local assets.
What is a “national blockchain”?
The term generally describes a network spread across many computers, configured but also controlled by public authorities or regulated groups. It is a network where only allowed computers confirm transactions. On this network, policies can show administrative rules. That design improves the ability to trace and control things, but it creates problems with the ideas of a really decentralized structure.
Advantages and risks
The advantages include easier financial oversight, simpler connection with the banking system, and a possible decrease in money leaving the country. Risks include authorities or allowed providers having much power. It can limit privacy as well as allow administrative controls over transactions. A user’s financial power depends on the technical and legal protections that prevent wrong use or censorship.
Framework for won-backed stablecoins
A framework allowing won backed stablecoins could speed up institutional acceptance – it could also create new ways for digital payments. It needs clear rules about collateral, checking along with separating reserves. Agreement among central banks, supervisors in addition to private participants will be very important to prevent overlapping powers and large-scale dangers.
Lee Eok-won’s proposal shows the tension between new ideas plus control. A national stablecoin can strengthen efficiency and monetary control. But its implementation on a “national blockchain” needs strong protections to keep decentralization, protect privacy next to stop concentrations of power that reduce users’ financial power.
