Home > Business > Finance

Where does Korea stand on stablecoin adoption?

Published: 12 Jan. 2026, 07:00 Updated: 12 Jan. 2026, 09:02

JIN MIN-JI
[email protected]

[JOONGANG ILBO]

[MONEY MOVER]

Capital moves in and out of Korea, driven by a range of economic and geopoltiical forces. In our "Money Mover" series, we explore key market developments that could shape investment decisions and influence the flow of global funds. — ED.

From buying coffee at Starbucks to purchasing lipstick at Olive Young, a growing number of Koreans are embracing stablecoins for everyday payments, often through overseas third-party payment platforms.

“I’ve made payments using stablecoins for an Americano at a cafe, as well as at pharmacies, restaurants, taxis and most other places,” said a crypto blogger nicknamed Rusiper, who makes payments through Redotpay, a Hong Kong-based fintech platform. “Online payment using stablecoin is also easy. I bought various products ranging from health supplements on Coupang to fried chicken on the Bedal Minjok delivery app.”

He added, “I mostly use [the dollar-pegged] USDT, as it can be easily obtained in both domestic and international exchanges, and its transfer fees are relatively low.”

His case reflects Korea’s slow and yet gradual opening to stablecoins — digital tokens pegged to fiat currencies such as the dollar — in a country that has traditionally taken a conservative approach to digital assets out of concern that they could undermine monetary policy, disrupt foreign exchange markets, or become a key tool for money laundering.

Stablecoin use remains less commercialized, mainly because, unlike in the United States and Europe, Korea lacks a regulatory framework dedicated to such instruments. However, the country now stands at a crossroads in the development of digital assets, as the government plans to introduce a new stablecoin law in the first quarter, according to the Ministry of Economy and Finance.

Total transactions of dollar-pegged stablecoins — USDT, USDC and USDS — jumped more than three-fold, rising from 7.1 trillion won ($4.86 billion) in June last year to 23.4 trillion won in October across Korea’s five crypto exchanges, according to Bank of Korea (BOK) data submitted in December to Rep. Cha Gyu-geun of the minor Rebuilding Korea Party. Globally, it could exceed $2 trillion by 2028, driven by crypto trading, remittances and e-commerce and global business-to-business settlements, according to a Morgan Stanley report in September.

“In 2026, stablecoins will integrate with legacy financial rails and, within the next five years, become fully integrated into global payment systems,” Ripple President Monica Long was quoted as saying in a crypto news outlet in December.

Rapid growth, unsettled ground

Stablecoins are increasingly emerging as a viable payment method, even at brick-and-mortar shops in Korea. Customers at participating stores can simply tap a stablecoin-backed credit card — physical or mobile — to complete a transaction. They are typically processed through overseas payment services such as RedotPay, REAP Pay and Stella Pay, which are mainly based in Hong Kong and Singapore.

Currently, the payment flow remains more conventional, as these transactions are routed through global card networks such as Mastercard and Visa, which convert the stablecoin into fiat currency before settlement.

This flow may be only transitory, however. “This process involving card companies is just a temporary step, using an intermediary gateway to work with existing payment infrastructure,” said Park Sung-jun, director of the Blockchain Research Center at Dongguk University and CEO of blockchain platform AndUs. “In the future, payments will be made entirely with stablecoins, without any intermediaries.”

A model from the local startup Kona I demonstrates the use of a won-pegged stablecoin, tentatively named KSC. KSC is a stablecoin version of local currency that can be registered with services like Samsung Pay or loaded onto prepaid cards for use at local currency merchants. [KONA I]

To unlock the stablecoin’s potential, a facilitator that can replace the role of the intermediaries will need to emerge, according to Kim Hyoung-joong, Director of the Cryptocurrency Research Center at Kookmin University. “These businesses will manage the rollout and onboarding of merchants when stablecoin payment systems are newly installed,” he said.

While such a facilitator could accelerate stablecoin adoption, the benefits are expected to be felt by corporations first, with Korean consumers likely taking longer to experience meaningful benefits.

“Corporations will see lower commission fees on overseas transactions as it emerges as a potential competitor to SWIFT,” the global messaging network that effectively holds a monopoly on cross-border payments, said Kim Bo-il, Digital Asset Research Section Head at the BOK’s payment and settlement system department.

“Consumers may not notice groundbreaking changes, as stablecoins’ benefits — fast, 24/7 transactions without fees — are already realized under Korea’s financial system. But as blockchain services and smart contracts advance, their practical usefulness could grow, unlocking new applications and value,” Kim added, drawing an analogy to the early days of smartphones, when their use was limited due to the lack of apps.

Other expected benefits include faster settlement times and the ability to make micro-payments as low as 10 won.

The average remittance fee for trade settlements could be reduced dramatically from the current 6 percent to just 1 percent using stablecoins, according to the Korea International Trade Association in November.

U.S. President Donald Trump holds the signed ″Genius Act″, which will develop regulatory framework for stablecoin cryptocurrencies and expand oversight of the industry, at the White House in Washington, D.C., U.S., July 18, 2025. [REUTERS/ YONHAP]

Clash over won-pegged stablecoins

Despite their potential, differing stances on regulations for won-backed stablecoins among financial authorities have slowed progress on crypto regulation and hindered the development of their ecosystem.

Following the passage of a first-phase bill focused on user protection in July 2024, the institutionalization of virtual assets has entered the final stage of negotiations over a second-phase bill covering market order and issuance rules.

The biggest point of contention in the bill is who should be allowed to issue stablecoins. While the BOK argues that only a consortium in which banks hold controlling stakes should be permitted to issue stablecoins, the Financial Services Commission (FSC) maintains that establishing a rigid ownership threshold should be avoided, as it would hinder participation by technology firms and stifle innovation.

Korea is moving toward allowing the issuance of won-denominated stablecoins initially through a bank-led consortium, before gradually expanding issuance rights to fintech companies, according to local media reports.

The regulators also clash over whether to establish a new consultative body to license stablecoin issuers. While the BOK says a committee to oversee the process is necessary, the FSC contends that a separate body would be unnecessary.

Jang Dong-hyuk, leader of the main opposition People Power Party speaks at a forum held to discuss key issues and desirable institutional framework for introducing won-denominated stablecoins at the National Assembly in Yeouido, Seoul, on Sept. 30, 2025. [YONHAP]

The setbacks have left companies in limbo.

Amid the uncertainty, major players are only making strategic moves without concrete plans. In November, Naver agreed to acquire Dunamu, operator of Korea’s largest crypto exchange, Upbit. Mirae Asset Group has also opened talks to buy crypto exchange Korbit, Korea’s fourth-largest crypto exchange, according to local media reports. Neither company shared specific details on how they would conduct their crypto businesses through the deals.

“Both Korea and the United States currently lack stablecoin issuing or distribution institutions established by law,” said Kim Seung-joo, a professor at Korea University’s School of Cybersecurity. “The difference is that in the United States, the market appears likely to open, prompting companies to explore various business opportunities. In Korea, however, it’s still uncertain whether the market will materialize, so activity is less vigorous than in the United States."

In July, the United States passed the so-called Genius Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act), a landmark bill that defines a payment stablecoin as a digital asset issued for payment or settlement. In January, President Donald Trump signed an executive order that emphasizes promoting the U.S. dollar's sovereignty by supporting the growth of legitimate, dollar-backed stablecoins globally.

Japan, a notoriously slow adoptor of digital payments, has nevertheless established a comprehensive regulatory framework for stablecoins and, in October, saw the launch of its first yen-pegged stablecoin, JPYC, by a domestic startup. The country’s banks are also working to issue similar coins later this year.

“The global financial landscape is undergoing a fundamental shift, as competitiveness in stablecoins evolves daily, unlike in the traditional manufacturing sector,” Director Kim said, noting the launch of stablecoins pegged to the euro and yen.

The first won-pegged stablecoin — KRWQ — was launched in October by AI agent platform IQ in partnership with decentralized finance protocol Frax, but it cannot be directly traded by residents in Korea. Its total trading volume surpassed 1 billion won less than two weeks after launch.

“The success of KRWQ, combined with the fact that Koreans are active stablecoin traders, could tempt more companies to issue won-pegged stablecoins. Delaying regulatory action could therefore escalate the threat, as the proliferation of won-pegged stablecoins issued abroad would make them harder for Korean regulators to control,” Kim added.

BY JIN MIN-JI [[email protected]]