A New Outlook on Stablecoins

Stablecoins are poised to play a pivotal role in transforming the global “flow of money” and the overall financial system. Just as smartphones dramatically changed the way we live, stablecoins have the potential to bring about a similar kind of sweeping change. 

What might the future look like?

As the name suggests, a stablecoin is a form of digital money designed to maintain a stable value—typically, one coin is pegged to the value of a national currency (for example, 1 stablecoin = 1 USD). Unlike Bitcoin, whose price can fluctuate wildly, stablecoins are designed to be used as reliably as the dollar. That’s what sets them apart.

1. Why does the United States place so much importance on stablecoins?

The U.S. sees stablecoins as a powerful tool to strengthen the influence of the dollar. Here's why:

A major buyer for U.S. government bonds is needed:

Companies that issue stablecoins typically hold U.S. government bonds¹ as collateral. As more people use stablecoins, these companies are required to buy more U.S. Treasury securities. This helps the U.S. government borrow money more easily. With the country facing growing debt and fewer buyers for its bonds, stablecoins may serve as a clever solution to this problem.

¹Government Bond: A government bond is a debt security issued by a government to raise funds. It represents a promise to repay the borrowed amount, along with interest, to the lender at a future date.

Spreading the dollar globally:

An overwhelming 99.9% of all stablecoins are backed by the U.S. dollar. As stablecoins spread across the globe, people may start using them in place of their own local currencies. This would further strengthen the dollar’s position as the most influential global currency—a concept often referred to as "dollar hegemony²."

² Dollar Hegemony: Dollar hegemony refers to the dominant role of the U.S. dollar as the world’s most powerful and influential currency. It is widely used in international trade and global financial transactions.

Faster and cheaper cross-border payments:

Stablecoins can be transferred directly between digital wallets without going through banks. This makes international remittances much faster—sometimes just minutes—and with little to no fees. In regions like Latin America or Africa, where local currencies are unstable, people are increasingly using dollar-based stablecoins as if they were their own national currency. The U.S. is encouraging this, as it helps bring foreign money into the American financial sphere.

The GENIUS Act:

To make stablecoins more trustworthy, the U.S. passed a bill called the GENIUS Act³. It requires stablecoin issuers to hold 100% of the value they issue in cash or short-term U.S. Treasury bonds. This ensures the coins are truly backed and secure, and at the same time, increases demand for U.S. bonds. However, while this boosts the dollar’s influence, it could also weaken America's control over traditional global financial systems—such as the SWIFT network⁴, which has been used in the past to sanction other countries.

³ GENIUS Act: The GENIUS Act is a U.S. legislative proposal aimed at regulating and institutionalizing stablecoins. It requires issuers to hold 100% of the issued amount in cash or short-term U.S. Treasury securities as collateral.

⁴ SWIFT Network: The SWIFT network is a global messaging system used by banks to securely and quickly send international money transfer instructions. If the U.S. removes a country from this network, that country is effectively cut off from the global financial system.

2. How is South Korea responding to stablecoins?

The Korean government is also paying close attention to stablecoins. Their main concern is that dollar-based stablecoins could dominate the local market, lead to capital outflows, and threaten Korea’s monetary sovereignty⁵—its ability to control its own currency. This is why Korea is considering launching its own won-backed stablecoin.

⁵ Monetary Sovereignty: Monetary sovereignty is a nation’s authority to issue and manage its own currency and independently determine and execute its monetary policy.

Why a won stablecoin might be necessary:

Dollar stablecoins are so convenient that some foreign workers in Korea prefer to receive wages or send money home using them instead of Korean won. If this trend continues, the use of the Korean currency could decline. That’s why there's a growing sense that Korea needs its own stable and reliable digital currency.

Challenges ahead:

Korea already has highly advanced payment systems like credit cards, Samsung Pay, and online banking. Because of this, many people wonder if there’s any real need to use a won stablecoin for domestic transactions. For a won-based stablecoin to succeed, it would need to offer something unique—an exclusive use case. One idea under discussion is linking it with K-content or encouraging its use by foreign investors trading in Korean markets.

Regulations and infrastructure:

The Bank of Korea is concerned that money could flow out of the country via stablecoins, or that such movements could become difficult to monitor—leading to issues like tax evasion. That’s why, much like in the U.S., Korea is moving toward bringing stablecoins under official regulatory frameworks. Companies like NHN⁶, a major IT firm, are working to develop a won-backed stablecoin system as part of this effort.

⁶ NHN: Originally an abbreviation for “Next Human Network,” NHN is now a comprehensive IT company involved in various industries including gaming, payments, advertising, commerce, cloud computing, and digital content.
NHN was formerly a joint venture between Naver and Hangame but later split into separate entities. In 2019, NHN Entertainment changed its name back to NHN to reflect its broader business identity. Today, NHN operates services such as Payco (payments), NHN Cloud, and NHN Commerce, and has also entered global markets through platforms like the webtoon service Comico.

3. How might stablecoins reshape the future?

A new financial system:

Thanks to stablecoins, the way money moves around the world could undergo a complete transformation. Transactions that once required complex banking procedures could become faster and more affordable.

The era of digital currencies:

We’re entering a time when Bitcoin, stablecoins, and CBDCs (Central Bank Digital Currencies) will coexist. China, for example, is already using a digital version of the yuan.

Impact on the global economy:

The rise of stablecoins could destabilize the currencies of countries that print too much money. On the other hand, dollar-based stablecoins could further strengthen the U.S. dollar’s global dominance.

A shift in the business landscape:

Traditional financial institutions like banks and credit card companies are showing interest in issuing their own stablecoins. Since stablecoins could threaten their existing business models, these companies are looking for new ways to generate revenue or protect their market share.

In conclusion, stablecoins are not just a topic for the crypto world—they're at the heart of a major transformation in how money moves globally. They're becoming a central piece in the struggle for monetary power between nations. Understanding how the world is changing and preparing for it is more important than ever.

Korean version: https://deposo.tistory.com/148