Won-backed Stablecoin: Unveiling South Korea’s Crucial Currency Control Hurdles

Key Points

1. South Korea's currency controls restrict the natural expansion of digital assets, including won-backed stablecoins.

2. Interbank transfers in South Korea are already efficient, offering instant settlement, year-round operation, and minimal fees, reducing the immediate need for stablecoins domestically.

3. Taiwan faces a similar issue with its currency, the NTD, which cannot back stablecoins due to regulatory constraints.

4. The rigid currency controls in South Korea negatively impact the broader potential for stablecoins and digital currency innovation in the country.

5. Regulatory sandboxes or controlled pilot programs could help test and potentially overcome these challenges for digital won adoption.