The ruling party has proposed legislation allowing companies with as little as Won500mn ($360,000) in equity capital to issue won-based stablecoins, a type of cryptocurrency backed by fiat money holdings. But the central bank is concerned that allowing their issuance could spark massive capital outflows that would hamper its ability to respond to foreign exchange crises such as the one that swept across Asia in 1997. That has put the Bank of Korea at odds with the government. “If we allow non-banks to issue stablecoins, this will cause big chaos like in the 19th century, when currencies issued by the private sector flooded [the market],” Bank of Korea governor Rhee Chang-yong said this month, referring to the US “free banking” era when hundreds of small banks were allowed to issue their own notes.