BOK Deputy Governor Urges Preemptive Steps on Tokenization Risks
Kwon Min-soo said asset tokenization could speed capital outflows, calling for soundness and policy safeguards across Asia.
Bank of Korea Deputy Governor Kwon Min-soo called for an appropriate preemptive response system in Asia against the risks posed by financial asset tokenization, speaking at an event in Seoul on the International Monetary Fund's Global Financial Stability Report, according to zdnet.co.kr.
Kwon said Asian countries that experienced IMF bailouts need such a system because tokenization could cause faster capital outflows.
He compared tokenization to F1 racing, saying a strong engine alone is not enough and that soundness, safeguards and policy frameworks are also needed.
At the same time, Kwon said tokenization could bring significant benefits to both the real economy and financial markets if it speeds up settlement and lowers intermediation costs in Asia.
The event was held at the Bank of Korea in Seoul and focused on the tokenization chapter of the IMF report.
Quick answers
What risk did the Bank of Korea official warn about?
Kwon Min-soo said financial asset tokenization could cause faster capital outflows in Asian countries that experienced IMF bailouts.
What benefits of tokenization were mentioned?
Kwon said it could benefit the real economy and financial markets if it speeds up settlement and lowers intermediation costs in Asia.