In a recent discussion on the future of won-backed stablecoins, Hassan Ahmed, the country director for Coinbase in Singapore, emphasized that these digital assets are unlikely to compete with dollar-denominated tokens in cross-border transactions. Instead, he argues that they should be seen primarily as a tool for domestic payments.
Ahmed noted that a won-backed stablecoin is expected to take a different growth trajectory, leveraging its strengths in the domestic market while complementing rather than competing with dollar stablecoins. This perspective aligns with ongoing debates in South Korea regarding the roles and regulations of stablecoins and their potential to modernize payment systems.
Policymakers in South Korea are grappling with implications of introducing won-backed tokens, including their ability to facilitate smoother transitions into dollar-backed stablecoins. Financial institutions, fintech companies, and digital asset exchanges are preparing for forthcoming regulations, shifting the dialogue from speculative cryptocurrency ventures to broader discussions about the regulations governing digital currency issuance and its relationship with the banking system.
The Bank of Korea has expressed caution regarding the introduction of stablecoins. Former Governor Rhee Chang-yong indicated a more open stance towards these tokens but raised concerns about increased dollar demand potentially complicating foreign exchange management. Senior Deputy Governor Ryoo Sang-dai has suggested that any introduction should occur gradually and primarily through tightly regulated commercial banks.
This cautious stance is particularly relevant in South Korea, where authorities closely monitor dollar demand and the capital flows associated with the fluctuating won. Such considerations underscore a central tension in the stablecoin debate: whether to commence issuance through banks, as the central bank has proposed, or to broaden the scope to include fintech firms and digital exchanges.
Ahmed acknowledged these risks but asserted that fears surrounding non-dollar stablecoins are often overstated. Currently, dollar-denominated stablecoins account for approximately 98% of the global stablecoin market, yet their applications in everyday transactions remain limited. This suggests that there is still room for local-currency stablecoins without posing a significant threat to national currency stability.
He projected that the primary role for a won-backed stablecoin would initially revolve around enhancing domestic payment efficiencies and financial applications where the won enjoys a natural advantage. The successful commercialization of these stablecoins, however, would depend on Korea’s ability to establish necessary regulatory frameworks and institutional structures for mainstream payment and settlement systems.
The current landscape adds urgency to this discussion. Despite a recent decline in its asset market, South Korea’s cryptocurrency market capitalization stood at roughly 87.2 trillion won ($59 billion) as of the end of 2025, with average daily transactions reaching approximately 5.4 trillion won—about one-third of the average daily trading value of the Kospi index.
Ahmed highlighted that Korea faces a challenge where retail enthusiasm ballooning contrasts sharply with the slow development of institutional frameworks. He pointed out that building trust—through clear regulatory standards, risk management protocols, and settlement finality—is crucial before significant capital can flow into this sector.
The regulatory approach could shape the stablecoin discourse fundamentally in Korea. Should won-backed stablecoins be classified purely as payment and settlement tools, regulations would likely focus on reserve management, issuer qualifications, and redemption processes. Conversely, if seen as standalone private money, discussions might expand to controversial topics around banking practices and monetary policy.
Local financial institutions and platform companies are gearing up for a regulated stablecoin environment. Notably, Naver Financial’s intention to acquire Dunamu—an operator of Korea’s largest cryptocurrency exchange—could create a significant intersection between established payment frameworks and burgeoning digital asset operations. Additionally, Hana Financial Group has been broadening its digital asset partnerships, extending its collaborations to include companies like Standard Chartered and Circle, focusing on stablecoin payments and cross-border remittances.
Ahmed compared Korea’s situation to Singapore’s path, where regulatory frameworks evolved alongside technological experimentation. Singapore’s Monetary Authority established stablecoin guidelines aimed at ensuring value stability for approved tokens.
Ultimately, he concludes, the dialogue around won-backed stablecoins must focus not only on their existence but also on the potential for their integration into a regulated financial ecosystem. He summarizes by stating, “Stablecoins don’t replace the currency; instead, they make it programmable, cheaper to move, and easier to settle, which fuses with current payment rails rather than competing with them.”
