South Korean regulators are contemplating a new registration system permitting domestic institutions to issue virtual assets, following approval for residents to invest in foreign-issued virtual assets. The introduction of Korean won-denominated stablecoins is under discussion, primarily for cross-border transactions, but concerns remain about their potential use in evading capital controls, especially when combined with US dollar stablecoins. The central bank is simultaneously advancing tokenized deposits and wholesale CBDC pilots to sustain the current dual financial system, while noting limited benefits for a retail CBDC due to an advanced domestic payment system.

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