The head of South Korea’s central bank has indicated that he is not opposed to the issuance of a won-pegged stablecoin; however, he voiced concerns regarding potential foreign exchange challenges. Rhee Chang-yong, the Bank of Korea Governor, expressed that issuing a won-based stablecoin could facilitate exchanges with dollar-backed stablecoins, potentially increasing the demand for dollar stablecoins and complicating foreign exchange management. His remarks come as President Lee Jae-myung's administration pushes for crypto regulation, amidst a decrease in the country’s foreign exchange reserves, which fell from $415.6 billion to $404.6 billion over six months. The ruling Democratic Party has introduced the Digital Asset Basic Act to allow companies with adequate capital to issue stablecoins, requiring them to maintain sufficient reserves for refunds and obtain approval from the Financial Services Commission. Meanwhile, the stablecoin market is predominantly dominated by US dollar-backed tokens, although other options like Circle's euro-pegged stablecoin are gaining popularity due to regulatory developments.

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