Hashed, a leading think tank in the cryptocurrency industry, is advocating for the implementation of a regulatory framework to support the growth of a stablecoin tied to the Korean won (KRW). In a recent report published on Mar. 24, Hashed Open Research and Four Pillars highlighted the potential benefits of launching a KRW stablecoin for South Korea.
The report suggests that a KRW stablecoin could enhance the practicality of the Korean won for digital transactions and strengthen the country’s position in the global stablecoin market. By bridging the gap between Korea’s crypto market and international digital asset ecosystems, the introduction of a KRW stablecoin could address structural inefficiencies in the Korean crypto market and serve as a foundation for emerging fintech industries.
One of the key advantages of a KRW stablecoin, as noted in the report, is the high liquidity of Korean exchanges, which could provide a competitive edge over stablecoins pegged to other fiat currencies like the yen or euro. However, the report also raises concerns about the rapid growth of dollar-based stablecoins, such as Tether (USDT) and USD Coin (USDC), which could lead to capital outflows from the country.
According to Hashed Open Research, the unchecked outflow of capital from Korea’s crypto market could pose a threat to the country’s financial stability and the strength of the won. To address these challenges, the report calls for a dedicated regulatory framework for stablecoins, emphasizing the dual nature of these assets as both payment instruments and investment assets.
The proposed regulatory framework would involve strict licensing and security requirements for both banks and non-banks issuing stablecoins. Additionally, the report suggests that foreign-issued KRW stablecoins should be regulated domestically, while foreign stablecoins pegged to other fiat currencies should only be allowed if they meet equivalent regulatory standards.
In light of these recommendations, Hashed is urging policymakers in South Korea to take proactive measures to support the growth of a KRW stablecoin and ensure the stability of the country’s financial ecosystem. By establishing a comprehensive regulatory framework for stablecoins, South Korea could strengthen its position in the global stablecoin race and foster innovation in the burgeoning cryptocurrency industry.