Kim Yong-beom, a former senior government official who served as the first vice minister of the Ministry of Economy and Finance and vice chairman of the Financial Services Commission, and currently the CEO of Hashed Open Research, pointed out that stablecoins linked to legal tender are reshaping global monetary power, and a new national strategy for the digital era must be written. This comes as domestic banks are belatedly starting to issue won-based stablecoins, suggesting the need to quickly prepare legal and institutional groundwork for stablecoin issuance. ★Refer to the April 24th issue, pages 1 and 5
In a phone interview with Seoul Economic Newspaper on the 1st, Kim emphasized, "Domestic banks and tech companies are greatly concerned about issuing won-based stablecoins" and "We must quickly establish a legal basis for minting stablecoins".
Stablecoins are virtual assets with values fixed 1:1 to legal tender like the dollar. The US Congress proposed the 'Genius Act' in February, requiring issuers to back all reserves with cash, US Treasury bonds, and bank demand deposits. The US Tether issues the dollar stablecoin USDT. Japan has permitted it centered around banks, and Hong Kong is allowing stablecoin experiments through regulatory sandboxes. However, South Korea is falling behind in the stablecoin issuance competition.
On his social network service (SNS), he stated, "Stablecoins are no longer financial service innovations, but a task of rewriting the monetary structure itself" and "Stablecoins are no longer an experiment, but a reshaping of monetary power and a national strategy for the digital era".
Kim cited Tether as a prime example. He said, "Despite the Luna incident, DeFi collapse, and FTX bankruptcy, Tether did not collapse" and "In the first quarter of last year, Tether recorded approximately $4.5 billion in net profit, with over $1 billion from US Treasury bond interest income". He added, "Tether's US Treasury bond holdings are around $110 billion, comparable to South Korea's or Germany's bond holdings" and "In essence, it's a mid-sized financial nation. With Tether's success, PayPal has issued its own dollar stablecoin, and Visa and Mastercard have introduced payment systems".
Kim believes this stablecoin ecosystem expansion provides significant advantages to individual companies. He sees benefits such as △customer funds remaining within the platform △interest income from reserve assets (like US Treasuries) △potential transaction fees and liquidity management profits △ability to design a proprietary economic ecosystem. He warned, "If Korea continues to lag without institutionalization, there's a scenario where stablecoins issued abroad could erode the domestic customer base" and "For instance, if a US-issued won-linked stablecoin is adopted as a payment method in global commerce or gaming platforms, the digital economy's currency would effectively become a US-issued digital currency, not the won".
This could result in surrendering monetary sovereignty overseas. He stated, "If we don't design (won stablecoins) now, we might end up re-importing digital won from abroad" and "The digital currency order has begun moving, and now it's a battle of either jumping in to protect it or watching it being taken away". Kim further emphasized, "We've moved beyond an era of consuming currency to an era of designing currency" and repeatedly stressed the need to introduce won stablecoins as quickly as possible.
- Reporter Shin Jung-seop
- jseop@sedaily.com
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