INTERVIEW Korea's digital economy, advanced payment systems bolster global crypto leadership

Maghnus Mareneck / Courtesy of Cosmos Labs

By Lee Kyung-min

• Published Oct 16, 2025 7:00 AM KST

Bank-supervised won-backed stablecoins to strengthen consumer protections, innovation

Asia is moving fast to turn stablecoins from niche payment tools into core financial infrastructure.

Japan has already launched pilots where yen-backed stablecoins are used for securities settlement, with Singapore and Hong Kong laying down clear rules for bank-issued tokens.

According to Maghnus Mareneck, co-CEO of Cosmos Labs, a U.S. blockchain firm, Korea has the right foundations to follow this path, boasting a highly digitized economy, advanced payment systems and consumers who are comfortable using digital wallets.

“The opportunity for Korea is to extend its leadership in digital payments by positioning the Korean won as a trusted, valuable settlement currency in Asia’s digital economy, not limited to Korea, but integrated across the region,” Mareneck said in a recent interview with The Korea Times. “Cross-border pilots with Japan show that regional adoption is moving from theory to practice.”

He expects stablecoins to become a key future settlement infrastructure for the Korean financial system in the next five years.

“It is realistic and within reach. Over the next five years, stablecoins are likely to move from pilots to production,” Mareneck said.

Korea has a strong banking system, advanced fintech adoption and regulators who are actively exploring digital assets. The missing piece is clear regulation.

“Once a regulatory framework is in place, stablecoins can be integrated into the existing financial system, just as online payments were decades ago. The vision is already being tested in pilots across Asia. For Korea, the most likely model is bank-issued, fully backed stablecoins that operate alongside central bank digital currency (CBDC) pilots and international payment networks. The technology is ready today. The question is how quickly policy adapts to allow deployment at scale," the CEO said.

Project Trinity, a project his firm is involved in that has a focus on yen-backed stablecoins, shows that stablecoins can be used for delivery-versus-payment settlement in capital markets with atomic finality, he added.

The same model could be used in Korea, where a won-backed stablecoin could support securities settlement, cross-border trade and institutional payments.

“The key factor to these projects’ success is connectivity. Central bank digital currencies will coexist with stablecoins, but without cross-chain protocols that allow different chains to communicate with one another, each system risks becoming a walled garden again. Korea has the chance to ensure a digital won interacts seamlessly across domestic finance, cross-border payments and digital asset markets, extending the model in a regional and global context," Mareneck said.

He said Korean regulators still approach stablecoins with caution, a perspective shaped by episodes of volatility in crypto markets. However, the industry landscape is changing, as regional pilots in Japan and growing institutional demand from firms such as Citi, JPMorgan and Wells Fargo show that stablecoins are becoming essential financial infrastructure.

To move from restrictive to enabling policy, regulators need clear frameworks that separate speculative crypto activity from regulated stablecoin issuance, he said.

“Japan’s 2022 Payment Services Act provides a good model. It limits stablecoin issuance to licensed financial institutions, requires full collateralization and mandates transparency. If Korea adopts a similar approach, stablecoins will be treated as trusted payment instruments rather than perceived threats to financial stability," he said.

Mareneck said stablecoins should be regulated as financial infrastructure rather than speculative assets, setting clear requirements on reserves, disclosures and interoperability, while still allowing licensed institutions to innovate within those rules.

This approach protects consumers, ensuring that every token is fully backed and transparent. At the same time, it gives banks, fintech firms and technology companies the confidence to launch products that meet regulatory expectations.

“Korea can draw lessons from Japan’s regulatory-first model and the U.S. GENIUS Act, both of which created clear and enforceable regulatory frameworks. With the right balance, Korea can encourage banks to launch won-backed stablecoins under supervision that will protect consumers, while also becoming a leader in blockchain-powered finance," the CEO said.

Short for Guiding and Establishing National Innovation for U.S. Stablecoins, the GENIUS Act is a sign that the U.S. is taking crypto seriously. The landmark legislation, signed into law by President Donald Trump on July 18, provides a comprehensive federal regulatory framework for payment using stablecoins. The law is significant because it provides a foundation for legitimate growth in digital assets, a formal declaration that the U.S. is embracing digital coins.

Mareneck said Korea’s fintech sector is admired worldwide for its scale and speed of innovation.

“Overall, regulation plays an important role in protecting customers and building trust, but if they become overly restrictive, there is always the risk of slowing down innovation and pushing activity to other markets in Asia that may be moving with more agility.”

Japan, Singapore and Hong Kong are already rolling out stablecoin frameworks designed for institutional adoption.

In that scenario, he said, the won risks being sidelined in cross-border settlement, leaving Korean institutions to rely on other currencies’ stablecoins.

“The better path is smart regulation: strong safeguards on reserves and transparency, but enough flexibility to support innovation, pilots and commercial use. Stablecoins are quickly becoming the rails of digital finance, and for Korea to maintain its leadership, it must ensure the won is part of that system rather than waiting on the sidelines.”