Korea Left Out as 21 Global Banks Including Goldman and Citi Set to Issue Stablecoins

Linked to Dollar, Euro, Pound, Yen, and More
Major Economies Near Completion of Legislation
Digital Asset Basic Act in Korea Stalled for a Year

Leading banks on Wall Street have united to issue a dollar stablecoin. In addition to the United States and Europe, banks from Asia, the Middle East, and Africa will each take part, but no Korean financial institution is participating. Experts attribute this to Korea’s delayed legislation on stablecoins. There are also voices calling for the protection of monetary sovereignty—such as issuing a won-based stablecoin—through legal frameworks.

Global Financial Institutions Step Up to Direct Issuance

On September 1, local time, 21 financial institutions—including Goldman Sachs, Bank of America (BofA), Citi, and Deutsche Bank—announced their plan to create an issuing entity in the second half of this year and to issue a dollar stablecoin in the first half of next year. Beyond the dollar stablecoin, their priorities also include the euro, and they plan to launch stablecoins pegged to the currencies of the G7 nations. This consortium began with ten members in October of last year; its size has since more than doubled.

By region, among the participants are ten companies from North America, including Goldman Sachs, BofA, and Citi; eight from Europe, including Deutsche Bank, UBS, and Santander. From Asia, Middle East, and Africa, Japan’s Mitsubishi UFJ Financial Group (MUFG), the UAE’s Sirius International, and South Africa’s Standard Bank are participating, respectively. No Korean financial companies joined. Regional coalitions are also forming to issue stablecoins. For example, the 37-member “Kivalis” consortium, which includes Spain’s BBVA, is expected to launch a euro stablecoin within this year.

Why Wall Street Banks Are Entering the Arena: U.S. Regulatory Moves

The reason financial institutions have decided to directly participate in a market previously dominated by non-financial firms is to take the lead in next-generation financial infrastructure. That’s because on-chain finance—where transactions are directly recorded on the blockchain—has taken hold, and stablecoins are expected to become the core payment method in this new environment.

Unlike the traditional SWIFT-based cross-border remittance system—which relies on multiple intermediary banks, suffers from time differences, and comes with high fees—the blockchain-based payment infrastructure supports real-time operations and instant settlement, offering major improvements in remittance speed and efficiency. It is the stablecoin that serves these payments. Even when stocks or bonds are tokenized and traded on the blockchain, if settlement must flow separately through legacy bank accounts, speed and time lags persist. If transactions are to settle instantly within the blockchain, a blockchain-native digital currency—a stablecoin—is essential. Currently, more than 80% of the stablecoin market is dominated by non-financial issuers Tether and Circle. Financial institutions are joining forces to provide alternatives.

The U.S. government’s efforts to bring virtual assets into the regulatory fold have also encouraged participation from financial institutions. The U.S. government plans to regulate virtual assets through the Genius Act and the Clarity Act. Ji Won Kim, a researcher at KB Securities, commented, “With these bills, the U.S. stablecoin market will formally enter the stage of regulatory oversight.”

Japan, UK, and EU Are All Preparing—But Korea Lags Behind

Not only the United States but other major developed nations are pursuing stablecoin legislation. Since June, Japan has enforced a subordinate ordinance to the Payment Services Act, effectively approving the circulation of overseas-issued stablecoins and fostering an environment for coexistence and competition with yen-based stablecoins. At the same time, the UK released a draft regulatory framework for pound-based stablecoins. The European Union is already enforcing the Markets in Crypto-Assets Regulation (MiCA).

However, Korea’s Digital Asset Basic Act, which would address stablecoin regulations, has been stalled with over a year of deadlock. This is why Korean financial firms cannot join the aforementioned consortiums. The United States and Europe have put in place the necessary legal criteria and requirements for banks to issue stablecoins, but Korea lacks any such regulatory framework. This prevents stablecoins from being recognized as valid payment instruments. In Korea, stablecoins are not recognized as official payment methods under the Foreign Exchange Transactions Act, making it difficult to settle or process them within the regulated system. For example, companies receiving stablecoins as export payments are affected. The inability of corporations to obtain real-name accounts also hampers the use of stablecoins for payments.

Why a Won-Based Stablecoin Matters

A won-denominated stablecoin is necessary to protect monetary sovereignty. If a won-based means of payment is not established, future trade and on-chain commerce could become dominated by dollar stablecoins, undermining the sovereignty of the domestic legal tender. It could also contribute to stabilizing the Korean government bond market. In the United States, stablecoin issuers are required to maintain one-to-one reserves with highly liquid assets such as the dollar and short-term Treasuries, matching the market capitalization of their stablecoins. Thus, increasing demand for stablecoins leads to increased demand for U.S. Treasuries. If Korean law required won-denominated stablecoin issuers to hold Korean short-term government bonds as reserves, this would create a structural source of demand in the short-term bond market. Seonggeun Kim, a researcher at Mirae Asset Securities, remarked, “Vitalizing stablecoins could help boost short-term bond supply and demand.”

This content was produced with the assistance of AI translation services.