Financial Services Commission and Bank of Korea continue the struggle over stablecoins···"Demand for joint inspection is excessive"

Source: DecenterKorea Original Title: Financial Services Commission and Bank of Korea Continue Struggle Over Stablecoins···“Demand for Joint Inspection Excessive” Original Link: https://www.decenter.kr/NewsView/2H0L9LCO3Y/GZ03

It has been confirmed that the Financial Services Commission revealed its stance that the Bank of Korea's demand for joint inspections of won stablecoin issuers is excessive. The perspectives of the Bank of Korea and financial authorities, which argue for limited allowances centered around banks and the supervisory authority of the central bank, directly conflict with the assertion that stablecoins can increase exchange rate volatility and promote capital outflows.

The National Assembly's Political Affairs Committee's Chief Expert Office submitted a review report on the bill with this content to the '10th Subcommittee of the Political Affairs Committee'.

The report indicates that the Financial Services Commission stated regarding the supervision of the stablecoin ( and the value-stable digital asset ) that “there is no relevant legislative precedent for the request for emergency action orders or the termination or suspension of transaction support by the Bank of Korea and the Ministry of Economy and Finance against the Financial Services Commission, and since the Vice Governor of the Bank of Korea and the Vice Minister of Economy and Finance are ex officio members of the Financial Services Commission, they can participate in discussions and resolutions of the Financial Services Commission to achieve the same purpose,” and conveyed to the Political Affairs Committee that “there is little practical benefit to be recognized separately.”

The Financial Services Commission also stated that “recognizing the Bank of Korea's joint inspection request authority even for some stable-value digital asset issuers, whose issuance volume is unlikely to affect monetary credit policy below a certain level, has excessive aspects.” Furthermore, the Financial Services Commission expressed the opinion that “as a legally constituted consensus-based administrative organization, the Commission is guaranteed independence and holds unique decision-making authority, and reflecting matters discussed in a separate consultative body may conflict with the purpose of the Commission's establishment and its inherent authority.”

Currently, the proposal by Kim Eun-hye, a member of the People Power Party, stipulates that when deemed necessary for the performance of the Bank of Korea's monetary credit policy, the Governor of the Financial Supervisory Service can be requested to conduct an inspection. The proposal by Ahn Do-geol from the Democratic Party of Korea includes the authority for employees affiliated with the Bank of Korea to participate in inspections jointly with the Financial Supervisory Service.

The Bank of Korea holds the position that the financial authorities and the central bank should discuss the licensing and supervision of stablecoins through a separate body. However, this essentially means that the Financial Services Commission has expressed that it cannot accommodate this. There is an analysis in the market that the delay in the disclosure of the Korean won stablecoin bill at the level of the Financial Services Commission is due to the significant gap between the two institutions. A source in the financial sector pointed out, “There are many claims that the government's legislative proposal is delayed due to the large differences in opinions between the Financial Services Commission and the Bank of Korea,” and added, “It seems likely that this may extend into next year.”