Korea Investment & Securities Says Korean Won Stablecoin Needed to Expand Tokenized Securities

Park Sung-jin, head of digital asset strategy at Korea Investment & Securities, said a Korean won-denominated stablecoin is needed to help expand the tokenized securities, or STO, market.

Speaking at a policy seminar at the National Assembly Members' Office Building in Seoul's Yeouido district on August 21, Park said the firm is interested in issuing stablecoins, but is even more focused on how they can be used.

Korea Investment & Securities is tracking the relationship between tokenized securities and stablecoins. Once the tokenized securities framework takes effect, assets will move on-chain, while payments will still move off-chain through bank or brokerage accounts, he said.

Park identified the gap in settlement speeds as a key issue. Tokenized securities can be transferred on-chain in seconds, but cash settlement remains in the traditional financial system and may still be completed on a business-day basis.

If tokenized securities gain traction, stablecoins will also need to be introduced, Park said. If tokenized securities are eventually issued on public blockchains and settled with stablecoins, stablecoins will serve as the final piece of the puzzle for the market, he added.

Korea Investment & Securities is paying particular attention to smart contracts among potential stablecoin use cases. Park said stablecoins can give money new functions that conventional currencies do not have, though no clear killer application has yet emerged overseas that could rapidly expand the market.

He said a range of smart contracts will likely drive broader adoption of the stablecoin ecosystem. Smartphones also lacked clear use cases in their early days, but spread quickly once a variety of applications emerged. In the stablecoin market, smart contracts will play the role that apps played for smartphones, Park said.