[Korean Won Stablecoins: Overcoming Regulatory, Demand, and Talent Challenges from the Start - Part 2]

**# Competition Intensifies Among South Korean Finance and Fintech Firms Amid Global Stablecoin Surge** **# KRW-Based Stablecoins Encounter Unique Challenges: Monetary Policy Risks and Structural Barriers** As South Korea embarks on legislative discussions around stablecoins, the market is marked by both excitement and caution. Praised for their rapid transactions, low fees, high accessibility, and transparency, the finance and fintech sectors are gearing up for entry. However, the structural issues of KRW-based stablecoins, compounded by inadequate infrastructure and a shortage of skilled professionals, create significant obstacles. **# Domestic Firms Rush to Secure Stablecoin Trademarks Amid Global Expansion** South Korea’s private sector is keenly observing the fast-progressing global stablecoin market. According to KIPRIS, Toss (formerly Viva Republica) filed 24 stablecoin-related trademarks on September 27, including ‘KRWV,’ ‘TKRW,’ ‘KRVV,’ and ‘TOSSKRW.’ These trademarks cover digital financial transactions, electronic fund transfers, and remittance services. Major players like Kakao Pay, KB Kookmin Bank, and Hana Bank previously filed their stablecoin trademarks, indicating their intent to explore this growing market. The surging interest aligns with the booming global stablecoin market. Yuanta Securities' report, "The Completion of the Digital Economy: KRW Stablecoins," released on August 30, highlights that stablecoin-related payment volumes rose from $2 billion in January 2023 to about $6 billion in February 2024, marking a significant increase. The total transaction volume from January 2023 to March 2024 reached an estimated $94.2 billion. Yuanta emphasizes that real-world use cases drive growth in both B2B scenarios such as cross-border payments, supplier settlements, and collateral transfers, and B2C transactions, where stablecoin payments appeal to multinational consumers due to their efficiency. **# Not a Reserve Currency—Concerns Over Monetary Policy Disruptions** Despite the global market's rapid growth, KRW-based stablecoins face challenges. The Korean won lacks the reserve currency status of the U.S. dollar, reducing natural demand. Additionally, there are concerns about the potential macroeconomic impacts of digital currency on South Korea's financial system. The Bank of Korea has warned that an influx of digital KRW could undermine its monetary policies, stating, “An influx of digital currency in an environment where liquidity is managed through policy interest rates could undermine the credibility of monetary policies.” Experts believe that addressing these issues requires developing both domestic and international use cases alongside measures like interest payment models to stimulate demand and enhance security for reserve assets. Minho Lim, a researcher at Shin Young Securities, stressed, “Flexible issuance frameworks led by private entities like brokerages, fintech firms, and Web3 startups are crucial for KRW stablecoins' success. A robust infrastructure operating 24/7 on public blockchains is essential.” Lim also suggested that interest-bearing mechanisms or platform rewards could enhance consumer appeal while advocating for diverse reserve assets, including government bonds and money market funds (MMFs), with transparent and secure management practices. **# Talent Shortage and Infrastructure Deficiencies: Barriers to Commercialization** Despite the importance of regulation, market demand, and infrastructure, the lack of specialized human talent remains a significant hurdle. The Korea Internet & Security Agency (KISA)’s "2024 Blockchain Industry Status Report," published in January 2023, notes that while employment in South Korea’s blockchain sector grew by 16.4% year-on-year to 3,961 professionals in 2023, the industry still suffers from a lack of expertise. A survey of 337 blockchain companies revealed that 54% cited "shortage of specialized blockchain talent" as their primary operational challenge. An anonymous source from the digital asset sector commented, "A major difficulty in domestic stablecoin projects is the limited talent pool capable of effective planning and operations. Regulatory compliance, risk management, and technical development demand specialized expertise, which is scarce." Seungsik Yoon, a researcher from Tiger Research, concurred, “While the technical aspects of stablecoin issuance are relatively straightforward, successful financial operations and sufficient reserves are critical. Above all, designing a clear use case that persuades consumers to adopt the stablecoin is key.” --- As South Korea’s financial and fintech ecosystem vies for stablecoin dominance, the race involves aligning with global growth trends and overcoming domestic structural challenges. Building resilient infrastructure, securing the needed talent, and managing regulatory and monetary risks will be crucial for KRW-based stablecoins' global competitiveness.