Author: Lee Yeon-woo, Korea Times
Translation: Felix, PANews
As the momentum for the launch of stablecoins pegged to the Korean won continues to grow, skepticism is also rising rapidly. Some question whether the won stablecoin can find a competitive advantage in the face of dollar-dominated stablecoins.
A proposed use case supported by lawmakers from the Democratic Party of Korea (DPK) and some industry officials is in transactions related to Korean pop music.
They suggest that K-pop platforms adopt won-backed stablecoins so that global fans can shop or purchase concert tickets more easily.
Korean lawmaker Min Byoung-dug stated at an economic policy seminar organized by the Democratic Party, “If dollar-denominated stablecoins flood the market, the won may be pushed out of circulation.”
“To protect part of the payment ecosystem, we should allow globally influential content and platforms (such as BTS and Galaxy smartphones) to use won-based stablecoins for transactions.”
Stablecoins are cryptocurrencies pegged to real-world assets such as fiat currencies or government bonds, designed to minimize volatility. They enable instant, round-the-clock transfers with very low fees, eliminating the need for intermediaries like banks or credit card companies. Stablecoins are particularly useful for cross-border transactions and withdrawals.
The potential applications of stablecoins are expected to expand further, especially after the U.S. formally included stablecoins in its regulatory framework through the Genius Act.
Proponents of using stablecoins in K-pop payments believe that won-backed stablecoins could significantly improve Korea's cross-border payment infrastructure.
DeSpread research analyst Declan Kim stated, “Stablecoins can simplify the payment process for overseas customers, eliminating the remittance and currency exchange hassles that often arise when accessing Korean content.”
Members of the K-pop group BLACKPINK, Rosé performing at the main stadium of the Incheon Asian Games
International K-pop fans also recognize the flaws in the current payment system. They told the Korea Times that some websites and apps do not accept foreign-issued credit cards—especially those requiring identity verification. Additionally, payment systems often crash during high-traffic periods (such as concert ticket sales).
If a stablecoin system were adopted, fans could purchase won-denominated stablecoins through cryptocurrency exchanges and send them directly to their purchasing accounts, thus completing transactions more efficiently.
The benefits for vendors are quite clear. Once the system is widely adopted, it could eliminate the foreign exchange fees and high transaction costs previously paid to networks like Visa, potentially enhancing profitability.
Moreover, there is additional revenue potential. Imagine if SMTOWN (the collective name for all artists under S.M. Entertainment, Korea's largest entertainment agency) launched its own stablecoin—like SMKRW—and sold merchandise directly to fans using it. The company could earn interest from the funds preloaded in users' wallets, similar to Starbucks' stored value cards.
However, for consumers, this incentive may not be strong enough—unless certain products are sold exclusively through won-backed stablecoins.
While the current payment system can sometimes be frustrating, it is not unusable. Globally popular platforms like Weverse have already introduced various international payment methods.
Additionally, although financial professionals often overlook this, a significant portion of the public remains unfamiliar with cryptocurrencies. If not introduced properly, the stablecoin system could ultimately appear more cumbersome than the traditional payment methods it aims to replace.
Ryan Yoon, a senior research analyst at Tiger Research, stated, “The core advantage of stablecoins lies in their ability to eliminate unnecessary intermediaries in the financial system. The key factor is ensuring that consumers do not have to manually convert to stablecoins, making the process seamless and not affecting user experience.”
On July 1, teenagers practice K-pop dance near Red Square in Moscow
While some international K-pop fans express interest in the idea of changing the payment experience, others are hesitant. Most say they have never heard of stablecoins before.
A fan from the Philippines compared this initiative to the previous hype around NFT projects in the Korean pop music industry, which ultimately failed to succeed. “They think K-wave fans are easy to market to, but we are more discerning.”
Another fan questioned whether policymakers truly understand the fan experience. “The government should abandon the idea that ‘as long as it’s built, fans will participate.’” “We can’t help but ask if the decision-makers have ever bought tickets to a K-wave concert.”
Regardless of opinions, this is still just an idea. The Democratic Party of Korea has begun to push for legislation to formally establish a framework for won-based stablecoins, but specific guidelines have yet to be determined.
Jay Jo, another senior research analyst at Tiger Research, stated, “A currency limited to a single industry, rather than widely applicable across various sectors, is unlikely to achieve economies of scale. It is important to consider what tangible benefits a won-backed stablecoin can bring to the Korean economy, rather than focusing solely on a single use case.”
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