{"id":42085,"date":"2025-08-14T02:31:44","date_gmt":"2025-08-14T02:31:44","guid":{"rendered":"https:\/\/dogewisperer.com\/?p=42085"},"modified":"2025-08-14T02:31:44","modified_gmt":"2025-08-14T02:31:44","slug":"asia-morning-briefing-koreas-onshore-won-policy-could-hinder-its-stablecoin-ambition","status":"publish","type":"post","link":"https:\/\/dogewisperer.com\/?p=42085","title":{"rendered":"Asia Morning Briefing: Korea\u2019s ‘Onshore’ Won Policy Could Hinder Its Stablecoin Ambition"},"content":{"rendered":"
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Good Morning, Asia. Here’s what’s making news in the markets:<\/strong><\/h2>\n

Welcome to Asia Morning Briefing, a daily summary of top stories during U.S. hours and an overview of market moves and analysis. For a detailed overview of U.S. markets, see CoinDesk’s Crypto Daybook Americas.<\/a><\/em><\/p>\n

South Korea\u2019s decision to shelve its central bank digital currency pilot in favor of private-sector stablecoins has sparked a wave of activities among fintechs and banks.<\/p>\n

As CoinDesk previously reported<\/a>, KakaoBank is weighing both issuance and custody roles, while Upbit and Naver Pay are collaborating on a payments-focused token that could help close the \u201ckimchi premium\u201d gap between local and global crypto prices.<\/p>\n

The opportunity comes as Korea is moving to extend FX trading hours<\/a>, allow more foreign participation in its onshore market, and position itself for inclusion in major global bond and equity indices. A regulated KRW stablecoin could fit into these modernization plans, offering faster settlement and tighter integration between banking and digital asset markets.<\/p>\n

But any Won stablecoin effort is going to run into a massive wall: Korea’s currency is not fully internationalized.<\/p>\n

Since the Asian Financial Crisis of 1997, Korea has kept deliverable KRW trading entirely onshore<\/a>. Foreign institutions cannot exchange won among themselves abroad, and every dollar\u2013won transaction must be settled through domestic intermediaries<\/a> under the Bank of Korea’s supervision.<\/p>\n

Authorities in Seoul maintain this system to monitor speculative flows, contain volatility, and preserve monetary policy autonomy.<\/p>\n

So for a Won stablecoin to work, it would have to be only used with whitelisted, KYC-verified addresses that have some tie to Korea.<\/p>\n

If a privately issued stablecoin becomes too dominant, it can erode a country\u2019s control over its currency, encourage \u201cunintended dollarisation,\u201d and weaken the central bank\u2019s ability to manage employment and price stability, Vera Yuen, a professor at Hong Kong University’s business school told CoinDesk in a note.<\/p>\n

The question is, just how useful would this on-shore only stablecoin then be?<\/p>\n

Domestic interbank transfers in Korea settle around the clock, 365 days a year. Sending money from one account to another is immediate, free, and widely used, leaving little payment friction for a KRW stablecoin to solve inside the country.<\/p>\n

Without a speed or cost advantage in domestic transfers, the token\u2019s primary utility would lie in cross-border settlement \u2014 and that is precisely where the onshore-only rule becomes a brick wall.<\/p>\n

Taiwan faces a similar dilemma. The island’s central bank does not impose capital controls<\/a> on the economy\u2014the Taiwan dollar (NTD) is freely convertible\u2014but it also can’t be used offshore, making it of questionable utility as a stablecoin<\/a>.<\/p>\n

An NTD-pegged token would be bound by Taiwan\u2019s stablecoin framework issued in June<\/a>, which requires local bank issuance, 100% onshore reserves, and central bank oversight with foreign exchange reporting, which are designed to stop it from becoming an unregulated channel for moving NTD value abroad.<\/p>\n

One day, a Won, and NTD, stablecoin may emerge, but its utility will likely be confined largely to domestic use rather than the global crypto market, so it’ll play a very niche role.<\/p>\n

It’d be a different story for a Hong Kong Dollar stablecoin<\/a> as the currency, which is pegged to the U.S. dollar, has no restrictions on being used abroad.<\/p>\n

Right now, it’s wait a wait-and-see mode to determine how much demand there is for non-USD stablecoins and what role they will play in the broader crypto economy.<\/p>\n

Market Movers<\/strong><\/h2>\n

BTC: <\/strong>BTC is trading at 123,901.58, supported by broader market momentum as the S&P 500 and Nasdaq hover near record highs on softer inflation signals and speculation of Fed easing.<\/p>\n

ETH: <\/strong>ETH is getting ready to challenge its all-time high, trading above $4700.<\/p>\n

Gold: <\/strong>Gold rose 0.3% to $3,356.98 as mild U.S. inflation data boosted expectations for a Fed rate cut next month and increased the odds of further easing this year.<\/p>\n

Nikkei 225: <\/strong>Asia-Pacific markets opened mixed Thursday, with Japan\u2019s Nikkei 225 down 0.31% after hitting a record high in the prior session.<\/strong><\/p>\n

S&P 500: <\/strong>U.S. stocks climbed Wednesday, with the S&P 500 and Nasdaq hitting new records as steady inflation data fueled expectations for two Fed rate cuts this year.<\/p>\n

Elsewhere in Crypto:<\/strong><\/h2>\n