Korea’s Onshore Won Policy Challenges Stablecoin Development
Market Highlights
South Korea has halted its central bank digital currency (CBDC) pilot, shifting focus to private-sector stablecoins. Key developments include:
- KakaoBank is considering both issuance and custody roles for stablecoins.
- Upbit and Naver Pay are collaborating on a payments-focused token to address the local-global crypto price disparity.
- South Korea aims to modernize its financial system through extended FX trading hours and increased foreign participation.
- A potential KRW stablecoin faces challenges due to the lack of internationalization of the Korean won.
- The existing system requires all transactions to be settled through domestic intermediaries, limiting cross-border utility.
- Authorities maintain strict controls to manage volatility and preserve monetary policy autonomy.
- Utility of any Won stablecoin may be restricted mainly to domestic use.
- Taiwan's situation mirrors this, as its currency is also not usable offshore under current regulations.
- A Hong Kong Dollar stablecoin could have broader appeal due to fewer restrictions.
Current Market Data
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