Insights

Korea's Digital Won Strategy: Navigating the Stablecoin Revolution

Jul 8, 2025

Author: Team SOOHO.IO

As the issuance of private sector-led won stablecoins has now become an irreversible global trend, voices of concern from the Bank of Korea regarding private sector-led won stablecoins are also being heard. Issues such as financial system stability, the effectiveness of monetary policy, and the privilege of currency issuance are all legitimate concerns.


However, we cannot give up the potential for future financial innovation due to fear of new technologies. The core challenge we face now has moved from "Should we allow it or not?" to the stage of "How can we wisely design the system and create a safe developmental path?".


SOOHO.IO approaches this from such a perspective and offers solutions that promote innovation under appropriate regulatory frameworks and supervision. What we seek is an ideal balance between a 'core safety mechanism' that prevents disorderly issuances and 'appropriate entry conditions' that foster financial innovation in Korea.



🌍 New Competitive Principles in the Global Stablecoin Market: 'Trust' and 'Network'


Stablecoins have already firmly established themselves as a core element of next-generation financial technology on the international financial stage. Notably, the standards for market competition have fundamentally changed. Previously, the question was, "Who has a more decentralized structure?"; currently, it is "Who is more trustworthy, practical, and has a broader network?". At this time, 'trustworthiness' refers not merely to technical security but to who is a 'substantive organization' that can take responsibility and solve problems in crises.



🔗 SOOHO.IO's Network Strategy: Touchstone Ecosystem


Recognizing the value of this 'connectivity' proactively, SOOHO.IO has been building a messaging infrastructure 'Touchstone' that supports interoperability among various stablecoin protocols for the past two years.


Why is this approach important?

  • Smooth interactions among stablecoins built on different technological bases are a prerequisite for the future digital currency ecosystem.

  • A foundation for Korean stablecoins to secure competitiveness in the international market.

  • An innovative alternative to the existing dollar dominance centered around SWIFT.


What is SOOHO.IO's technological competitiveness?

  • Strategic collaboration with Chainlink: Integrating self-developed linking technology C2CC with Chainlink's CCIP system to enhance network scalability.

  • Attracting investment from ConsenSys: As the first blockchain company in Korea to attract investment from ConsenSys Ventures, we have secured international trust.

  • Track record of cooperation with large enterprises: Practical project execution experience with major companies such as Samsung SDS and LG CNS.



🏗️ The Ideal Model for Won Stablecoins Proposed by SOOHO.IO


SOOHO.IO's directional goals are as follows:

  1. Establishing a cooperative body with trustworthy financial institutions and businesses.

  2. Developing and implementing practical use-case examples that create social value.

  3. Expanding the ecosystem through connections with international networks.


Currently, SOOHO.IO is working with cooperative institutions that agree with these directions to form a consortium and is preparing for the empirical service launch of a won-based stablecoin.



📈 Changes in Bank of Korea's Policy Direction and New Opportunities


Observing the process of policy changes at the Bank of Korea reveals interesting patterns:

  1. Initial stage: "Stablecoins can be replaced with CBDC-based deposit tokens developed by the central bank."

  2. Intermediate stage: "Only bank-led stablecoin issuance should be prioritized for allowance."

  3. Current stage: "Unanimous agreement from related institutions including the Bank of Korea is necessary in the issuance approval process."


This change shows that the policy stance is evolving from 'complete prohibition' to 'conditional allowance', and then to 'securing enhanced supervisory powers.' SOOHO.IO interprets these policy changes as new opportunities. We aim to contribute to creating a safe yet innovative stablecoin environment through cooperative communication with regulatory authorities.



🤝 Building the Future through Cooperation, Not Conflict


The essence of the discussion surrounding stablecoins is not the confrontation of pros and cons. Creating a societal consensus on 'what level and type of regulation' will lead to a 'safe yet efficient stablecoin environment' is key.



📊 Major Concerns and Various Perspectives


Considering both the concerns of opposing views and the perspectives of proponents, the following can be summarized:

Classification

Opposition Logic (Claims)

Analysis and Rebuttal/Alternatives (Proponents' Logic)

1. Monetary Policy

Constraints on monetary policy effectiveness

• Excessive liquidity due to indiscriminate issuance.

• Decrease in monetary trust and invalidation of interest rate policies.

1:1 value exchange, stable money supply

• A transformation of 'money's form' rather than 'creation of money' (from analog won to digital won).

• Alternatives: Legislate against 'indiscriminate issuance' by mandating 100% reserves and strict audits.

2. Financial Stability

Transfer of systemic risk

• 'Coin bank runs' occur if issuers fail.

• Crisis spreads to virtual assets and traditional financial markets.

Manageable through the quality and transparency of collateral assets

• The Terra-UST incident was a failure of a 'collateral-less' model.

• Alternatives: ① Restrict reserves to cash and short-term government bonds ② Mandate independent external audits ③ Diversify risk with a consortium model.

3. Public Interest

Transfer of currency minting profit (seigniorage)

• It is unfair for public revenue to shift to private companies.

Increased tax revenue from innovation outweighs seigniorage losses

• The effect of increased tax revenue due to improved efficiency across the economy offsets the losses from seigniorage.

• Alternatives: Consider models that recoup part of the revenue to the national treasury through special corporate taxes or fund creation.

4. Prevention of Illegal Activities

Exploitation of AML/CFT channels

• There is concern about the misuse of anonymity for illegal fund transfers and tax evasion.

Stronger controls are possible technologically

• Blockchain records all transactions permanently, making it easier to trace.

• Alternatives: ① Mandate KYC (Know Your Customer) for all wallets ② Apply the travel rule (rules for fund transfers).

5. Consumer Protection

Lack of consumer protection devices

• Losses for investors during issuer bankruptcy or hacking.

• Lack of deposit insurance schemes.

Protection devices can be designed through regulation

• Problems arise from 'lack of regulation.'

• Alternatives: ① Introduce a strict licensing system for issuers ② Mandate that customer reserves be kept in separate trust accounts.

6. Digital Divide

Deepening financial exclusion (digital divide)

• There are concerns that the elderly and vulnerable groups who find it difficult to use digital devices will be excluded from finance.

Develop in parallel with the existing financial system

• Adding 'diversity' to payment methods without making a radical shift to a cashless society.

• Alternatives: Implement inclusive financial policies such as offline support centers and user education.

7. Monetary Sovereignty

Competition with CBDCs and weakening of monetary sovereignty

• If private stablecoins dominate the market, it could reduce the role of CBDCs and weaken national currency influence.

Role sharing and a testing ground for innovation

• CBDCs can serve 'wholesale', while private stablecoins can operate as 'retail'; thus, mutual growth is possible.

Alternatives: Employ a 'two-track' strategy of validating technology and services through the private market and reflecting it in CBDC design.


SOOHO.IO provides a Touchstone infrastructure that can be suitably utilized for the alternatives mentioned in the above table, preparing consortium and empirical services, aiming to build a won stablecoin ecosystem that addresses concerns while maintaining the momentum for innovation.



🚀 Vision for the Won Stablecoin to Achieve Together


SOOHO.IO aspires to be not just a technological provider but a cooperation partner of Korean financial innovation, offering the following core values to build a safe and innovative won stablecoin environment:



💡 Core Competencies

  1. Proven technological reliability: Established stability through ConsenSys investment and partnerships with large enterprises.

  2. Global connectivity: Strategic alliances with Chainlink and various mainnets.

  3. Experience in regulatory compliance: Understanding the regulatory environment through participation in the Bank of Korea's CBDC project.

  4. Security expertise: Proven track record in asset protection amounting to 3.2 Trillion Won and advanced security technologies.



🎯 Focus Areas

  • Consortium collaboration: Building a cooperation network with reliable financial institutions.

  • Developing empirical services: Implementing practical use cases for safe and useful won stablecoins.

  • International connectivity: Securing global interoperability.



🌈 A New Chapter of Financial Innovation Created through Cooperation


The success of the won stablecoin cannot be achieved through technology alone. The key elements are partnerships based on 'trust' and ecosystem expansion through 'connectivity.'


SOOHO.IO aims to be a reliable partner that provides a safe and innovative technological infrastructure in this journey. We will build a new future for finance in South Korea together with regulatory authorities, financial institutions, and all stakeholders.


Join SOOHO.IO in creating the future of Won Stablecoins!


Want more information or to discuss partnerships?


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