Virtual Assets: 160 Trillion Won Leaked Annually... Urgent Need to Introduce Won-denominated Stablecoin

"Virtual Assets: 160 Trillion Won Leaked Annually... Urgent Need to Introduce Won-denominated Stablecoin"

Won-denominated stablecoins already circulate offshore... "A framework of trust must be built through institutions"

It has been suggested that 160 trillion won worth of virtual assets are flowing out of Korea annually, and that a Won-denominated stablecoin should be created to prevent foreign currency outflow and participate in the changing global payment ecosystem.

On the 12th, at a seminar titled 'Global Stablecoin Trends and Opportunities for Korea's Digital Economy,' hosted by Democratic Party lawmakers Lee Kang-il and Min Byeong-deok at the National Assembly Members' Office Building in Yeongdeungpo-gu, Seoul, Kim Tae-rim, a representative attorney at Axis Law Firm, cited a joint report by Tiger Research and CoinGecko to make this statement.

Attorney Kim stated that while legislative debates are ongoing, Won-denominated stablecoins are being created and circulated offshore, saying, "The more control is strengthened, the more the market itself moves beyond national borders. We must create trust through safety devices and allow the market to operate on that foundation."

He cited the following as principles for designing a Korean-style system: ▲Safety devices (issuer requirements, 100% reserves, clear redemption obligations) ▲Channels to induce flow internally (responsibility for distribution through domestically registered intermediaries) ▲Linkage between public and private sectors (compatibility with deposit tokens and CBDC).

The seminar was co-hosted by the Digital Convergence Industry Association, the Korea Web3 Blockchain Association, and the Digital Currency Governance Group (DCGG), and sponsored by the Digital Asset eXchange Alliance (DAXA).

Kim Ki-hong, Chairman of the Digital Convergence Industry Association, pointed out in his welcoming address, "Despite the capabilities of major domestic (virtual asset) operators, the ambiguous regulatory environment is a limiting factor for industrial development."

He added, "Future competition is likely to be more about financial infrastructure and institutional design than technology itself," explaining that institutional arrangements are necessary for the successful establishment of Won-denominated stablecoins.

Joshua Townson, DCGG Global Policy Lead, suggested that the UK's virtual asset policy differs from the uniform regulation of the European Union's MiCA, stating, "We must create a framework of trust where companies can grow."

Participants on this day argued that Won-denominated stablecoins could be an opportunity for the Korean economy, and that institutionalization should be expedited to avoid falling behind in a financial market being reshaped by stablecoins.

Vincent Chok, CEO of Hong Kong virtual asset company First Digital, said, "Won-denominated stablecoins could serve as a bridge for potential global investors interested in Korea."

Rahul Advani, Ripple's Co-Head of Global Policy, who participated in the presentation via video, said, "The (stablecoin) system being created in the National Assembly now will determine whether Korean companies become mere observers or active participants."