"KRW Stablecoin as a National Interest Measure to Prevent Dollarization"

US, Japan, and EU have already established and implemented legislation

Four bills pending domestically, all with different requirements

Significant gap in capital requirements: from ₩500 million up to ₩5 billion

Emphasis on "strengthening monetary sovereignty"

Issues of anti-money laundering and wallet screening

"KRW-based stablecoins are ultimately for the national interest, and legislation needs to be established in order to utilize them as a defense mechanism against dollarization."

At the seminar "Global Trends and Domestic Implications of Stablecoin Regulation and Business," held by Barun Law LLC’s Digital Assets and Innovation Industry Team on the afternoon of the 19th at the 2nd floor conference hall of the Seoul Gangnam Textile Center Building, attorney Han Seo-hee emphasized the necessity of systematizing domestic stablecoins.

"KRW Stablecoin as a Defense Against Dollarization"

Around 80 experts from academia, industry, and the legal community attended the event. Each session featured discussions on the current status of global stablecoin regulation, payment system structures, and domestic business responses, with panelists including Kim Gap-rae of Korea Capital Market Institute, attorney Han, and Lee Seong-san, the lead of Solana Superteam Korea.

Attorney Han outlined the features of four bills currently pending in the National Assembly. "Assemblyman Min Byung-deok's bill prescribes a minimum capital of ₩500 million, Kang Jun-hyun's is ₩1 billion, and Ahn Do-geol and Kim Eun-hye's bill sets the requirement at over ₩5 billion," she said. "There’s currently no bill restricting issuers to only financial institutions; the market is open to various types of businesses." She pointed out that the varying issuer requirements and capital standards make it difficult for the industry to prepare for regulatory changes.

She also noted Korea is lagging behind overseas in terms of institutionalization. Han stated, "Japan has had legislation since 2019, Europe has comprehensive frameworks including MiCA, and the US also has finalized regulations ready for implementation. In Korea, bills are only beginning to appear now."

Han further advised on how domestic companies might respond moving forward: "None of the proposed bills restrict issuance solely to financial institutions; there is a structure that allows diverse participants. However, because capital requirements differ greatly from ₩500 million to ₩5 billion depending on the bill, actual businesses will have to closely watch the government and parliamentary discussions to determine their approach."

She added, "If the capital requirement is low, solo issuance is possible, but once the bar is raised above ₩5 billion, it is likely that consortia including banks, big tech, virtual asset operators, and fintech firms will be needed. Pre-emptively establishing anti-money laundering systems, integrating wallet screening functionality, and choosing between public and private blockchains should also be considered."

Real-time Payments and Disintermediation: Transforming Even Securities Systems

The seminar also presented case studies of overseas stablecoin systems. In the first presentation, Dr. Kim Gap-rae of Korea Capital Market Institute emphasized real-life examples of global stablecoin environments, particularly focusing on the United States. "USDC issuer Circle deposits reserve assets into BlackRock's money market funds, and anyone can transparently verify asset compositions on-chain in real time," he explained. "Like a credit card network, stablecoins are replacing backend payment infrastructures at lower cost and greater efficiency."

Dr. Kim further stated, "The real-time, low-cost, and disintermediated structure is transforming not only payment networks but also securities transaction systems. In the US, stablecoins are already used regularly for fractional investment trades, and as the market grows, USDC has become virtually the sole stablecoin in use." He warned, "Innovation occurs quietly but can suddenly upend the market. If regulatory preparations lag until then, it’s already too late."

Lastly, Lee, the lead of Solana Superteam Korea, introduced technical implementations involving stablecoins. He showcased NFT commerce and cross-border remittance projects based on proprietary stablecoins issued both at home and abroad, stating, "In Korea as well, it is quite feasible to implement stable payment systems utilizing smart contracts and decentralized verification frameworks." He highlighted that domestic platforms are simultaneously achieving both security and transparency through deposit-based pegging structures and multi-signature mechanisms.

Reporter Hwang Dong-jin radhwang@hankyung.com