[Editorial] 'Bank Alliance' Won Stablecoin... Will Stopping the Levee Halt the Water Flow?

Source: TokenPost Original Title: [Editorial] ‘Bank Coalition’ Wonhwa Stablecoin… Will It Stop the Water Flow by Building a Dam? Original Link: https://www.tokenpost.kr/news/insights/323283 The political circle and financial authorities are considering a ‘consortium’ model involving banks and companies to introduce a won-based stablecoin. The plan is for reputable banks to lead issuance and for companies to support the technology. On the surface, it appears to be a compromise that captures both ‘stability’ and ‘innovation.’ However, a closer look reveals that there is no real innovation, only a stopgap measure born from protecting existing financial vested interests and administrative convenience.

While we engage in armchair discussions, the market has already spoken. Recently, the foreign fintech companies-led won-based stablecoin ‘KRWQ’ emerged, surpassing 1 billion won in trading volume in a short period. There was no government license or grand consortium of banks, but driven solely by market demand and technology, ‘Digital Won’ has begun to circulate across borders. This is not a cause for despair. Innovation is inherently like water seeping through cracks, and the clear signal has been proven that it cannot be stopped by building dams with regulations.

Currently, the global financial market is engaged in a ‘currency war without gunfire.’ Look at the United States. Private tech companies like Circle and Tether are expanding dollar dominance into the digital world, and some platforms are fiercely fighting regulatory authorities to pay interest to users. Even Japan, a symbol of conservative finance, is different. Through bold legal revisions, it has opened issuance to not only banks but also remittance companies. As a result, startups like ‘JPYC’ have issued yen stablecoins that are settling into the market and even penetrating daily transactions. While the US and Japan focus on ‘utility’ and ‘innovation’ by the private sector, Korea remains a closed pond.

Meanwhile, what about Korea’s discussions? Even after seeing the private sector’s rapid progress with KRWQ, they are still obsessed with ‘how to prevent accidents’ and are trying to confine innovation within bank boundaries. A consortium in the form of a bank alliance is inherently conservative. Decision-making will be slow, and usage will be limited to avoid risks. Most importantly, stablecoins that completely block benefits to users are no more than ‘digital gift certificates’ with slightly faster remittance speeds. Who in Korea, with its already top-tier mobile banking network, would want to use such inconvenient coins?

A more fundamental issue is ‘identity.’ If banks, under strict government control, gather to issue coins that do not pay interest and are only valid domestically, how is this different from the ‘Central Bank Digital Currency(CBDC)’ issued by the Bank of Korea? Rather than creating a ‘supervised coin’ that stifles private creativity and dynamism, a CBDC guaranteed by the state is far more efficient and secure. The consortium model risks killing private innovation and losing public efficiency, becoming a ‘double-edged sword.’

True innovation comes from market competition. As KRWQ shows, technology has already crossed borders. We need to reflect on why the US and Japan have boldly opened issuance to the private sector. If only strict reserve regulations are maintained, capable companies like Naver, Kakao, or Toss should be allowed to compete equally with banks and offer better services.

Superficial compromises will only lead to market obsolescence. The world is engaged in a borderless digital currency war, and it is not the time for us to be trapped in the ‘Galapagos’ of bank alliances and indulge in self-praise. The National Assembly and authorities must lay the groundwork for a genuine ‘Digital Won’ with global competitiveness, not just a compromise for vested interests. If that cannot be achieved, it is better to abandon the discussion and focus on CBDC.