Korea’s Won Stablecoin Debate Is Missing the Point: It’s Not Who. It’s How.

Editor’s note: This column appeared in the South Korean publication TechM and is published here in English with permission.

The Lee administration’s five-year economic strategy has now put digital assets on the national agenda, pledging both the introduction of crypto spot ETFs and the creation of a regulatory framework for stablecoins. ETFs are investment pipes for the capital market, while stablecoins are settlement pipes for the real economy. Mentioning both in the same plan marks a significant step forward for Korea’s digital-asset industry.

But Korea is now at the stage where technical detail matters. Issuer requirements, reserve composition, and the scope of disclosures and audits all need to be worked out. Debate on a KRW stablecoin remains stuck on turf: who authorizes, who supervises, who can hit the brakes. The Financial Services Commission wants to license and police conduct under a new Digital Assets Act. The Bank of Korea argues that monetary policy and financial stability risks justify a de facto veto. It also fears that private stablecoins could undercut the case for a central bank digital currency. Yet those questions of institutional turf are not what matter most for users, markets, or the Korean economy. The framing itself obscures the real question: what design would make a KRW stablecoin trusted, useful, and resilient for households and firms?

Design is not theory. It is a set of choices you can put in law and code. What sits in reserves, and where. Who captures the interest on those reserves. How narrow the issuer’s business perimeter is. How disclosures and audits work in practice. Get these choices right, and a won stablecoin can settle ETFs, move tokenized securities, cut remittance costs, and shorten cross-border trade cycles. Get them wrong, and the token becomes a speculative on-ramp with little value to the real economy.

Put simply: ETFs are investment pipes for the capital market, while stablecoins are settlement pipes for the real economy. Korea can capture global capital flows only when both move in tandem.

The United States has already answered the “how” with a floor, not a ceiling. In July, Congress enacted the Genius Act (signed July 18, 2025), a federal rulebook for payment stablecoins. It regulates by function, not label, requiring one-for-one high-quality reserves, monthly disclosures, and prompt redemption. Nonbank issuers fall under the Office of the Comptroller of the Currency (OCC); bank and credit-union subsidiaries answer to their primary prudential regulators.

The Act also draws the brightest line: issuers may not pay or promise yield or interest to coin holders. That may read as issuer-friendly—issuers fund themselves with zero-interest liabilities and keep the carry on safe assets—but it serves a public purpose. It preempts rate wars and blocks the drift into longer-duration, higher-risk portfolios.

You can see the Act’s impact in product rollouts, not press releases. Payments infrastructure is following suit: Visa has expanded settlement beyond USDC to include PayPal USD and Global Dollar, plus Circle’s euro token (EURC). Stripe now lets platforms and merchants accept USDC at checkout and either convert to local currency or settle on-chain.

Banks aren’t standing still. As the Wall Street Journal reports, JPMorgan, Bank of America, Citigroup, and Wells Fargo are exploring a jointly issued dollar stablecoin—underscoring that stablecoins are a scale business.

Capital markets are sending an even louder signal. Bullish says it received its entire $1.15 billion IPO proceeds in stablecoins—a first in U.S. public markets—with a settlement basket spanning dollar- and euro-denominated tokens from Circle, Paxos, PayPal, Ripple, Société Générale, and others. Coinbase, Circle, and Bullish are already public, and firms like BitGo and Gemini are reportedly preparing listings—making crypto the IPO market’s breakout rookie.

What should Korean readers watch in the United States? Import the logic, not the politics.

Korea should avoid two illusions. First, that the crux is who holds the license. It isn’t. Licensing follows design. Split roles by objective: the central bank leads on financial stability, FX spillovers, and liquidity testing; the market regulator handles licensing, conduct, and consumer protection; relevant ministries run AML and sanctions screening. Codify conservative reserve rules. Set an interest policy and stick to it.

Then put the token to work. In the United States, stablecoins are already embedded in commerce and capital markets. Visa and Stripe are wiring them into payment flows. Bullish settled its IPO in stablecoins. That’s the direction of travel: from exchange base asset to operational rail.

Second, that stablecoins are a growth panacea. They aren’t. Results depend on distribution costs, network access, and growth in adjacent markets. A stablecoin is a zero-interest liability backed by safe, liquid assets. Margins are thin. Issuers earn the carry on cash, bills, and repos—and from it pay distributors, compliance, security, and operations. Scale matters. That’s why public filings from leading issuers show strong top-line growth tied to interest income but modest net income after partner payouts and overhead. Circle’s filings report $1.7 billion in 2024 revenue (including reserve income) and $156 million in net income—driven almost entirely by the carry on safe assets.

None of this ends the policy debate. Critics still worry about linkages between coins and banks when part of the reserve sits as deposits—and about the reverse channel when redemptions push stress back into banking markets. In March 2023, Circle disclosed $3.3 billion of USDC reserves at Silicon Valley Bank; when SVB failed, USDC briefly depegged before deposit guarantees restored confidence. FDIC insurance protects deposits up to $250,000 per depositor, per insured bank; it does not insure institutions or crypto balances.

That is the difference with Korea: Washington wrote the traffic rules and told the market to drive. Seoul is still arguing over who holds the keys.

If Korea wants a won stablecoin that matters, give it work on day one: settle spot ETF trades; connect to tokenized securities (STO); cut remittance costs; and settle cross-border B2B invoices in KRW with fewer hops. Without real uses, the token drifts into speculation. Move the debate from “who” to “how.”