Can Korean Won Stablecoins Compete With the Dollar?

The U.S. Treasury Secretary has openly mentioned the expansion of stablecoin issuance, indicating the U.S. government's strong commitment to fostering stablecoins. This move has raised concerns among domestic investors about the competitiveness of Korean won stablecoins, and interest is growing regarding the impact of the rapid growth of dollar stablecoins on the Korean economy.

The view is that stablecoins can only gain true value when they are widely used in daily life, similar to Korean bank currency. Simply issuing a large quantity does not guarantee ultimate success, they point out.

This is particularly advantageous in resolving issues such as price discrepancies during currency exchange or settlement delays that frequently occur in international payments on e-commerce platforms. They have the potential to present a new payment paradigm by complementing the limitations of existing financial infrastructure.

The YouTube Premium subscription case clearly illustrates the inefficiencies of the current global payment system. Subscription fees vary by country, often leading consumers to complicated workarounds: finding a cheaper country, converting Korean won into Play Store or Google Store points, and buying gift cards to make local payments. Such cases highlight the need for payment system improvements that stablecoins could simplify.

Stablecoins can contribute to leveraging country-specific production cost differences in the global economy. In particular, the recent surge in AI data centers consumes vast amounts of electricity, and varying power structures and prices across countries significantly affect the margins of computing power operations. Efficient international remittances and payments using stablecoins can promote economic activities where computing resources are produced and utilized in regions with lower electricity costs, thereby increasing overall productivity.

The real-world asset (RWA) tokenization market, which initially garnered high expectations, has not grown as quickly as anticipated. Currently, government bond-related tokens account for approximately 30-40 trillion won of all issued crypto assets, while stock-related tokens are only about 3-4 trillion won. Experts point out that for the RWA market to truly expand, the movement of fiat currencies must first be activated, emphasizing that the digitization and efficient movement of currency must precede the tokenization of various real-world assets.

Through legislation like the 'Genius Act,' the U.S. is first securing dollar flows, laying the groundwork for the expansion of the dollar stablecoin ecosystem. The strategy is to prioritize solving simple money movement—payments, settlements, and remittances—and then gradually expand into financial assets, securities, and asset management. In this trend, the dollar maintains its status as the existing reserve currency within the stablecoin ecosystem, strengthening its hegemony.

This demonstrates that issuing a stablecoin does not give a currency power it did not previously possess.

There is a prevalent understanding that it is realistically difficult for the Korean won to have the same international power as the dollar. Therefore, it is argued that Korean won stablecoins should be approached from the perspective of defending the domestic payment market rather than international expansion. Concerns are growing that if the strong influence of dollar stablecoins penetrates the domestic market, Korea's price-setting power could shift overseas. The role of Korean won stablecoins as a defensive strategy to protect the domestic payment market is crucial.

By leveraging the advantages of 24-hour operation and low transaction costs, stablecoins can streamline the current complex and inefficient payment system. This has the potential to provide consumers with a stable price experience and sellers with an efficient payment method, thereby increasing overall economic productivity.

This would help defend monetary sovereignty against the dollar and solidify its position in the domestic market. The perspective is that a domestic-focused strategy should be pursued, similar to department store gift certificates, by exerting strong influence within a specific ecosystem.

This cost-saving effect can incentivize sellers to offer goods and services at lower prices to consumers. Experts emphasize that designing the detailed structure of debit payment methods is therefore important for stablecoin activation.

This is seen as a safeguard to prevent risks such as bank runs, based on the premise that if a stablecoin has a value of 1,000 won, 1,000 won must be returned. This reflects the stance of financial authorities, demonstrating a policy direction that prioritizes the stable operation of stablecoins.

With the lack of active roles from credit card companies and existing payment service providers, there are difficulties in establishing practical uses for stablecoins. Concerns are raised that stability-focused policies could hinder innovation for market expansion.

It is true that credit card sales payments are generally deposited to the seller within 3 days, or at most 6 days.

The success of a stablecoin, according to analysis, depends not on its issuance volume but on its turnover rate and expanded use in real life. As seen in Japan's JPYC case, if the issuance amount remains at around 20 billion won and is not practically used, despite expectations, questions like "Why was it issued?" may arise. Therefore, beyond issuance regulations, there is an urgent need to consider how stablecoins will be used in real-life payments outside of exchanges—that is, how to build a payment and distribution ecosystem.

From a bank's perspective, there is effectively little incentive to issue stablecoins. Even with a 50%+1 share, banks can procure funds most cheaply through deposits. Stablecoins make it difficult to generate net interest margins, thus banks are inherently passive. Therefore, it is predicted that the stablecoin ecosystem can only grow if banks can secure distribution rights, such as payment and settlement, in addition to issuance.

It is pointed out that if dollar stablecoins flow into Korea, companies and consumers will naturally shift to dollar-based services in pursuit of profit. This is a factor that could threaten the Korean won's monetary sovereignty in the long term. Therefore, activating Korean won stablecoins is considered a crucial task for the government to protect monetary sovereignty and provide tangible benefits to businesses and consumers. It is emphasized that the government must take the lead in actively creating an environment for the Korean won stablecoin ecosystem.