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

Major U.S. Wall Street banks have joined forces to issue a dollar-denominated stablecoin. While banks from the United States and Europe participated, there was also one bank each from Asia, the Middle East, and Africa; however, no Korean financial institutions were involved. Analysts attribute this to delays in legislating stablecoin regulations in Korea. Some experts argue that Korea should establish regulatory frameworks to protect its monetary sovereignty, including issuing a Korean won stablecoin.

Global Financial Institutions Take Direct Action

On September 1 (local time), 21 financial institutions—including Goldman Sachs, Bank of America (BofA), Citi, and Deutsche Bank—announced plans to establish an issuing corporation in the second half of this year, aiming to release a dollar-denominated stablecoin in the first half of next year. Alongside the dollar stablecoin, the consortium will prioritize issuing a euro-denominated stablecoin and plans to create coins pegged to the currencies of the Group of Seven (G7) nations. This consortium began last October with 10 member institutions and has more than doubled in size since then.

By region, 10 institutions from North America—including Goldman Sachs, BofA, and Citi—participated, while eight institutions from Europe participated, such as Deutsche Bank, UBS, and Santander. From Asia, Mitsubishi UFJ Financial Group (MUFG) from Japan joined; the Middle East was represented by Sirius International from the United Arab Emirates; and Africa by Standard Bank from South Africa. No Korean financial institutions are among the participants. Some groups are forming by region to issue stablecoins. For example, the "Kivalis" consortium—including Spain’s BBVA and 37 institutions—is also expected to launch a euro stablecoin within this year.

Why Even Wall Street Banks Are Getting Involved: The U.S. Is Institutionalizing Stablecoins

The reason financial institutions are entering a market previously dominated by non-financial companies is to take the lead in next-generation financial infrastructure. Financial transactions conducted directly on blockchain—so-called on-chain finance—are becoming established, and stablecoins are likely to emerge as the primary payment mechanism in such systems.

Unlike traditional SWIFT-based international transfers—which involve multiple intermediary banks, time delays, and high fees—blockchain-based payment and settlement infrastructures offer real-time operations and instant payments, resulting in superior remittance speed and efficiency. Stablecoins are responsible for enabling these payment transactions. Even if tokenized stocks or bonds are traded on the blockchain, using traditional bank accounts for payment can be slow and introduce time lags. Real-time finalization within the blockchain ecosystem requires a blockchain-native digital currency—i.e., a stablecoin. Currently, the stablecoin market is dominated by non-financial issuers such as Tether and Circle, which together hold more than 80 percent of the market capitalization, prompting financial institutions to work together to provide alternatives.

Efforts by the U.S. government to incorporate virtual assets into the regulatory framework have also encouraged financial institutions to participate. The U.S. government plans to regulate virtual assets through the Genius Act and the Clarity Act. Kim Jiwon, a researcher at KB Securities, said, "With the enactment of these bills, the U.S. stablecoin market is entering a full regulatory phase."

Advanced Economies Including Japan, UK, and EU Are Preparing—But Korea Lags Behind

Not only the United States but also other major advanced economies are moving forward with stablecoin legislation. Since June, Japan has implemented a subordinate ordinance to its Payment Services Act, effectively allowing the distribution of foreign-issued stablecoins and creating an environment for coexistence and competition with yen-based stablecoins. The United Kingdom issued a regulatory draft for pound-denominated stablecoins during the same period. The European Union (EU) is already enforcing the Markets in Crypto-Assets Regulation (MiCA).

However, South Korea’s digital asset basic law, which would address stablecoin institutionalization, has stalled for over a year. This is why Korean financial institutions are unable to join the aforementioned consortium. The United States and Europe have established legal standards and requirements for banks to issue stablecoins, but South Korea has not yet established such laws. Consequently, stablecoins cannot establish themselves as payment methods, which has become a major obstacle. Under Korea’s Foreign Exchange Transactions Act, stablecoins are not officially recognized as payment instruments, making it difficult to handle or settle them within the formal financial system—for example, when a company receives export proceeds in stablecoins. Corporate real-name accounts are also not permitted, making the use of stablecoins as a payment solution problematic.

Why a Korean Won Stablecoin Is Needed

A Korean won stablecoin is necessary to defend monetary sovereignty. Without a won-based payment option, future trade or on-chain commerce could become dominated by dollar stablecoins, thereby weakening the nation’s legal currency and monetary sovereignty. It could also contribute to the stability of Korea’s government bond market. In the United States, issuers must maintain reserves of highly liquid dollars and short-term U.S. Treasury bonds at a one-to-one ratio with the stablecoin’s market capitalization in order to issue stablecoins. This means increased demand for stablecoins leads to greater demand for U.S. Treasury bonds. If legislation in Korea requires won-based stablecoin reserves to be held in Korean short-term government bonds, a structural source of demand would be created for the short-term bond market. Kim Seong-geun, a researcher at Mirae Asset Securities, said, "The activation of stablecoins can help the supply and demand dynamics of short-term government bonds."

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