Kakao Pay · Me2on... Volatile Won-based Coin Stocks

Korea Economic Daily

Summary

Recently, it was reported that theme stocks related to won-based stablecoins in the Korean stock market are experiencing extreme volatility driven solely by expectations.
Experts pointed out that even after the introduction of stablecoins, beneficiary companies will remain limited, deeming the market expectations excessive.
Currently, it is expected that the implementation of the won-based stablecoin business will take time due to the lack of legislation and the need for government approvals.

Securities Firms: "Market Expectations Are Excessive"

In the Korean stock market, theme stocks related to won-based stablecoins are experiencing repeated sharp fluctuations. Even though legislation for won-based stablecoins has not been established, stock prices are rising or falling based solely on expectations. Experts predict that even if won-based stablecoins are introduced, the number of beneficiary companies will be limited, diagnosing that "market expectations are excessive."

According to the Korea Exchange on the 15th, the share price of Kakao Pay plummeted by 22.38% over the past 3 trading days. While the company's share price surged by 102.64% in June alone, it has recently turned downward. The share price of Me2on, another won-based stablecoin theme stock, also dropped 23.69% over the last 3 trading days. Other related stocks such as Aton, Nexus, and ITCEN Global have also seen declines this month.

This trend is interpreted as the result of domestic and international securities firms raising questions about the effectiveness of won-based stablecoins. Hyun-Jong Jung, a researcher at Korea Investment & Securities, said, "Even if the issuance of won-based stablecoins materializes, the global utility of virtual assets based on the won, which is a non-key currency, will be limited."

Issuance of stablecoins is still prohibited in Korea. Even if the National Assembly passes a bill in the second half of this year, it will take time to prepare enforcement ordinances and regulations, so actual implementation is expected around early 2027. Whether non-banking entities will be allowed to issue stablecoins is also unclear. Even if the government permits non-banks to issue, only a few companies are expected to engage in the business. A financial industry official stated, "To issue stablecoins, government approval is required, and if a company does not have a clear business plan or sufficient capital strength, it will be difficult to obtain approval."

In the market, many recall the 'NFT craze' of 2021 when looking at won-based stablecoin theme stocks. NFTs are digital assets that use blockchain technology to prove ownership. At that time, the stock prices of listed companies soared whenever they mentioned NFTs, regardless of the relevance to their actual business—this trend lasted about a month. Many companies saw their share prices surge simply from being grouped as NFT-related stocks, even if their businesses were unrelated. However, when the NFT craze subsided, related stocks plummeted collectively.

Reporter Hyung-Kyo Seo seogyo@hankyung.com