On the 18th (local time), U.S. President Donald Trump signed both the 'Genius Act,' which legalizes the stablecoin known as the digital dollar, and the 'CBDC National Prevention Act,' which prohibits the issuance of Central Bank Digital Currency (CBDC). Both CBDC and stablecoins are digital currencies. However, while CBDC is issued by the Central Bank, stablecoins are issued by private corporations such as Tether and Circle. The United States has entrusted the issuance, use, retrieval, and burning of the digital dollar entirely to the private sector.
In contrast, China is maintaining a CBDC route issued by its Central Bank, the People's Bank of China. The government and Central Bank are leading the charge in promoting digital currency. In March, the Chinese government identified the development and application of the digital yuan (e-CNY) as one of its five key financial initiatives, and on the 3rd, it announced efforts to pilot the digital yuan within the Shanghai Free Trade Experimental Zone.
While the two countries have entered a power struggle over digital currency, Korea has not yet established a specific direction for stablecoins. Earlier, the Bank of Korea was pushing for CBDC, but President Lee Jae-myung brought attention to the U.S. model by pledging to issue stablecoins during his candidacy. However, Bank of Korea Governor Lee Chang-yong has noted in public forums that stablecoins issued by private corporations carry significant side effects, attracting opposing opinions. Spokesperson Cho Seung-rae of the Presidential Committee on Policy Planning said on the 14th, 'There are issues such as who will handle stablecoin issuance and authorization, and how to manage relations with other countries.'
Digital currencies vary based on the issuing entity. If issued by private corporations, like in the U.S., they are called stablecoins, while if issued by a Central Bank, like in China, they are referred to as CBDC. The only difference is the name, while the functionality and utility of digital currencies remain similar.
However, the impact of the issuing entity differs. CBDC is the safest form of currency since it is guaranteed by the Central Bank. Because the Central Bank directly manages and supervises the issuance and burning of CBDC, there is no burden in implementing monetary policy. However, unlike regular currency, CBDC is regulated by real-name systems, which means the government can track and monitor who used how much CBDC and where, posing a downside.
Stablecoins issued by the private sector offer excellent versatility. They can be purchased and used at any time from virtual asset exchanges, 24 hours a day. In particular, they are seen as a promising way to innovate overseas payments or currency exchanges, which typically incur excessive time and expenses. However, since the issuance and retrieval of stablecoins are left to private corporations, regulation is impossible. Should unregulated stablecoins circulate on a large scale, it could not only negatively impact monetary policy but also lead to various side effects such as tax evasion, money laundering, and capital outflow.
Due to these pros and cons, the Korean government is also grappling with the issue. Some have pointed out that both stablecoins and CBDCs do not align with Korea's realities. CBDCs might fail to gain traction in the domestic market due to their real-name registration requirements. In contrast, stablecoins may not attract much overseas demand. In a situation where the Korean won is not internationalized, issuing Korean won stablecoins could easily result in international rejection.
Some argue that a compromise must be found. A representative example is when the governor suggested that stablecoins should be issued by commercial banks rather than by private corporations or the Central Bank. A representative from the virtual asset industry noted, 'No matter who becomes the issuing entity, I believe that discussions between the private and public sectors to increase demand for digital currency should lead to success.'