"The Rise of Stablecoins Amid Dollar Crisis"... What is Korea's Response Strategy? [Pacific's Future Finance]

Trump's Tariff Policy Materializes

'Dollar Weakness' Continues, 'Stablecoins' Surge

"Korea Needs to Prepare a Response"

'Won Stablecoin' Issuance as an Alternative

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In October 2024, Steven Miran, Chairman of President Trump's Council of Economic Advisers, released "A User's Guide to Restructuring the Global Trading System" while at Hudson Bay Capital. This report, known as the 'Miran Report', points out that foreign central banks are buying U.S. dollars (U.S. Treasury bonds) to suppress their exchange rates and accumulate trade surpluses, leading to dollar strength and threatening the dollar's status as the world's reserve currency and U.S. national security. The report proposed a trade restructuring strategy using tariffs as leverage, which was adopted as a key economic policy of Trump's second administration.

As Trump's tariff policy became visible, the U.S. dollar has weakened against almost all major currencies compared to the beginning of the year. It has fallen more than 10% against the euro and the Japanese yen, and more than 8% against the British pound. Traditional economists see this as a reflection of investors' concerns that the U.S. will suffer more than other major countries and experience a recession due to the tariff policy. As major countries prepare to sell U.S. Treasuries and retaliate with tariffs, the U.S. faces concerns about securing new buyers for U.S. Treasuries. At this point, 'dollar-based stablecoins' are gaining attention.

New Buyers of U.S. Treasuries, 'Dollar-Based Stablecoins'

According to the "Report on the Necessity and Legalization Proposal of Won Stablecoin" published by Hashed Open Research in March 2025, dollar-based stablecoins account for 99% of the stablecoin ecosystem. This is a monopolistic structure that far exceeds the dollar's share in the traditional financial system (88% of international foreign exchange transactions, 50% of international settlements). Since the reserve assets of stablecoins must consist only of safe assets in the currency unit to secure liquidity, as dollar-based stablecoins spread as a means of payment, the U.S. can secure new buyers for U.S. Treasuries. In June 2024, former House Speaker Paul Ryan mentioned in a Wall Street Journal article that "dollar-based stablecoins are becoming important buyers of U.S. Treasuries," in the same context.

Immediately after taking office, President Trump announced the goal of "promoting the development and growth of dollar-based stablecoins to protect the sovereignty of the U.S. dollar," urging Congress to have related legislation on his desk before August. Accordingly, the U.S. Stablecoin Bill (GENIUS Act), jointly proposed by Senate Banking Committee Chairman Tim Scott and Senate Digital Assets Subcommittee Chairman Cynthia Lummis, passed the Senate Banking Committee last March, and a vote in the full Senate is underway from May 1.

By this point, it becomes clear that the Trump administration's support for dollar-based stablecoins is a strategic choice centered on national interest, beyond mere voter appeal. If the stablecoin bill passes Congress this year, the dollar-based stablecoin market is likely to grow explosively. Stablecoins can establish themselves as a global payment infrastructure, and as with all infrastructure industries, the first-mover will have an absolute advantage. The GENIUS Act allows platform companies like Meta, Google, and Home Depot to issue stablecoins. These companies already have a massive user base, and it is expected that they can quickly popularize dollar-based stablecoins through their platforms.

Could 'Won Stablecoin' Be a Breakthrough?

From Korea's perspective, the spread of dollar-based stablecoins could lead to serious issues such as weakening demand for the won (KRW), rising exchange rates, increased corporate costs, and foreign investment outflows. The problem is that even recognizing this grave situation does not easily lead to a response plan. Korea, which relies on the U.S. for security, must seek a breakthrough to protect the Korean economy while minimizing the negative impact of U.S. tariff policies. However, the options are very limited.

The discussions centered around the National Assembly on fostering the digital asset industry and issuing won stablecoins stem from this awareness. In a situation where changes in the U.S. directly affect the Korean economy, it may be wiser to actively manage and seek alternatives, even at the risk of taking no action. Strategically fostering the digital asset industry to attract foreign capital into Korea, creating demand for won stablecoins centered on Southeast Asia, and expanding the distribution of won stablecoins using domestic virtual asset operators and fintech companies' platforms could be the most realistic and effective strategy Korea can take.

Lawyer Kim Hyo-bong of Bae, Kim & Lee LLC I

He has built expertise in digital finance and virtual asset regulation and market practice while working at the Financial Supervisory Service for over 10 years. After completing the 41st class of the Judicial Research and Training Institute, he worked at the Financial Supervisory Service on improving fund and trust systems, private equity dispute resolution, and digital finance-related tasks, and since 2022, he has focused on supporting the enactment of the Virtual Asset User Protection Act and its subordinate regulations, and supporting the self-regulation of virtual asset listings on exchanges. He graduated from Yonsei University with a degree in law, completed the LL.M. program at Columbia Law School in the U.S., and the Professional M.B.A. program at Sungkyunkwan University Graduate School of Business, gaining a deep understanding and balanced sense of both domestic and international law, as well as corporate management and financial market practice. Since joining Bae, Kim & Lee in 2024, he has been providing legal advice on various digital finance-related matters, including virtual assets and STOs.

The Future Finance Strategy Center of Bae, Kim & Lee LLC (Director: Senior Advisor Han Jun-sung) was launched in May 2024, building a team of top experts in finance and IT, including virtual assets, electronic finance, regulatory response, and information protection, in line with accelerating digital innovation in the financial sector and the development of financial technology.