Despite stablecoins being on the top of the table at every conversation concerning the crypto regulatory space, South Korean lawmakers and central bank officials are yet arguing over who should head the talk on stablecoin issuance.
Circle rules out KRW stablecoin issuance
Circle CEO Jeremy Allaire dismissed the issuance of Korean won stablecoin, for the time being even while he pushed to deepen the presence of stablecoin issues Circle in South Korea. He backs the idea of a locally led KRW token as “essential” for the country to remain in the global market.
Allaire states that the firm is closely watching developments in the National Assembly legislation under South Korea’s Digital Asset Basic Act.
“If a legal pathway is established for global companies like Circle to legally enter and operate, just as we have done in Hong Kong, Singapore, Japan, and Europe, we are very willing to obtain a license and establish a South Korean branch,” Allaire said to a local newspaper.
Rather than issuing a KRW token itself, Allaire pointed to a model led by Korean banks, fintech firms and crypto companies. He said Circle is open to partnering with such groups and supporting consortium-led efforts to develop a won-denominated stablecoin, where the company acts as a technology provider rather than a direct issuer.
Circle, the company behind the USDC stablecoin, is instead focusing on expanding distribution and infrastructure. Allaire highlighted its Arc blockchain and Circle Payments Network as tools that can bridge between the traditional financial rails and blockchain-based payments, enabling local institutions to launch and manage their own stablecoins.
“We may find ways to partner with Korean won issuers, and to be supportive of these emerging consortiums as they look to build Korean digital currencies,” he said.
Circle expands in South Korea as regulations are still under discussion
The company has already stepped up its activity in South Korea, signing new USDC distribution partnerships during Allaire’s visit. The push comes as regulators consider rules that could require foreign stablecoin issuers to set up local operations and maintain full reserve backing.
Kucoin reported that both the stablecoin issuers, Circle and Tether, have expanded their local operations in South Korea, ahead of new rules. These rules may require foreign stablecoin issuers to set up a local office and fully back their tokens with reserves.
It also states that larger issuers could also be labelled as “significant digital payment tokens”.
Despite these announcements, the CEO’s concerns are similar to that of U.S. lawmakers in terms of the introduction of the ‘Clarity Act’ bill, according to reports. The lack of a new stablecoin regulation in South Korea could become a massive setback for the president, Lee Jau-myung.
He had acted as the spokesperson for the crypto landscape expansion, promising to legislate won-pegged stablecoins on the campaign trail last year, upon his winning. But since his victory in June, Lee and his administration have found themselves frustrated by the banking sector and the Bank of Korea.
The opportunity for Circle here is to bet that USDC and its underlying technology can potentially become the primary settlement layer. This layer would connect any future KRW stablecoin to global liquidity, mirroring how dollar tokens currently act as the main link for South Korean exchanges and remittance platforms.
