The Bank of Korea (BOK) warns of risks from stablecoins pegged to the won, arguing that private organizations lack “institutional trust” to maintain stable value, while calling for traditional banks to take the lead. BOK's report expresses concerns about the risk of “depeg” (, citing the collapse of Terra/Luna and the fact that USDC once fell to 0.88 USD during the Silicon Valley bank crisis. BOK believes that stablecoins not pegged to USD, such as euro or won, are even more vulnerable due to a lack of liquidity and global trust. However, the bank asserts that it does not want to stifle innovation, but aims for “safe and sustainable innovation.” Meanwhile, BDACS and Woori Bank have just launched KRW1, the first fully regulated stablecoin, built on Avalanche. Some experts argue that BOK remains “stuck in old thinking,” as the world shifts to an on-chain economy “that does not require trust.”
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