[Editorial] Measures Needed to Introduce Won-based Stablecoins While Minimizing Side Effects

A frenzy is sweeping stocks related to 'won-based stablecoins' in the domestic stock market. While this may be attributed to anticipation over the introduction of won coins, such overheating even before institutionalization is a serious concern.

The rollout of won coins has been gaining pace since the start of the Lee Jae-myung administration. During the presidential campaign, the President pledged, “We must establish a won coin market to prevent marginalization and to curb capital outflow.” The Democratic Party is planning to propose a Digital Asset Innovation Bill next month, which will require coin issuers to have a minimum paid-in capital of ₩1 billion. The United States Senate also moved forward, passing the so-called ‘GENIUS Act’ on the 18th to push for stablecoin legislation.

With the 'war of digital currency' expanding around stablecoins, it is no longer possible to delay the institutionalization of won coins. At the end of last month, the global market capitalization of major 10 stablecoins had grown to $230.9 billion (about ₩314 trillion). In order to address issues such as dollar-based stablecoins replacing the won in the domestic market and accelerating capital inflows and outflows, institutionalization is unavoidable. It is also unacceptable to leave related stocks soaring unchecked under vague expectations amid a regulatory vacuum.

However, the introduction of won coins is a major issue that goes beyond simple technological innovation and could have a significant impact on the entire financial system. Therefore, the government and Bank of Korea must prepare thoroughly and carefully regarding institutionalization, such as coin issuer qualifications and consumer protection mechanisms. If trust in won coins collapses and a large-scale coin withdrawal (coin run) occurs, confusion in the financial market and user losses will be inevitable. There is also the possibility that such coins could elevate risks related to foreign exchange or limit the effectiveness of monetary policy.

In this respect, the statement by Yu Sang-dae, Deputy Governor of the Bank of Korea—“Issuance should first be allowed for banks, and only gradually expanded to the non-bank sector”—is reasonable. The government must keep in mind that the spread of stablecoins can pose potential risks to financial stability and the broader economy, and do everything possible to minimize any and all side effects that may arise.