The Era of Dollar Stablecoins: Do We Really Need a KRW Stablecoin?

These days, anyone can easily buy and use dollar-pegged stablecoins like USDT and USDC, so is there really a need for a KRW-based stablecoin? I’ve been thinking about this question.

Looking at the current Korean digital asset market, KRW stablecoins, STOs, local currencies, and Bitcoin ETFs seem to be the main issues. However, the second phase of the Virtual Asset Act feels somewhat lacking compared to expectations. Overseas, digital investment products like dollar-based stablecoins and crypto ETFs have already seen tremendous growth. As a result, there’s a sudden surge of stablecoin experts in Korea, and companies, institutions, and even the government are treating this issue as important.

 

Stablecoins are useful for daily life because they are not volatile, making them ideal for remittances and payments, and they serve as a bridge between fiat and crypto markets. They are also the underlying assets for DeFi products and can pay interest, making them quite useful from a user’s perspective.

 

 

On the other hand, there are concerns that creating a KRW-based stablecoin could allow foreign entities to control the won. That’s why some argue that a CBDC (Central Bank Digital Currency) alone is sufficient. There’s also much debate over who should issue a KRW stablecoin—should it be traditional financial institutions, or should companies also have the opportunity? Everyone has a different stance.

 

In fact, the U.S. government is promoting dollar-based stablecoins to increase demand for U.S. Treasury bonds, and from a user’s perspective, stablecoins are hard to avoid because they offer price stability and low remittance fees. In reality, overseas workers are already receiving salaries in stablecoins and sending money home cheaply.

 

 

Ultimately, dollar-based stablecoins are already so convenient and powerful—will people really use a KRW-based stablecoin? Honestly, I’m skeptical. If a KRW stablecoin is to be created, it would need to guarantee stable returns for users, be usable for various purposes like local currencies, vouchers, or points, and offer government-backed benefits to be even somewhat viable.

 

Technically, creating a stablecoin isn’t difficult. However, legal and policy frameworks, as well as integration with CBDCs, are much more important. For a KRW stablecoin to have real meaning, it should be treated as a public good and be open for various companies to utilize freely12.