INTERVIEW Korea's strengths in global trade lay groundwork for stablecoins adoption: Fireblocks director

Jinnie Lee, sales director at Fireblocks / Courtesy of Fireblocks

By Lee Kyung-min

• Published Feb 28, 2025 8:25 AM KST
• Updated Mar 3, 2025 11:17 AM KST

Korea is one of the world’s most reliant countries in a highly globalized world of trade, which means stablecoins can help save costs, improve transactional efficiency and ultimately enhance economic performance, according to a crypto infrastructure expert.

“Stablecoins are expanding their role in cross-border trade and payments,” Jinnie Lee, sales director at Fireblocks, said in a recent interview with The Korea Times.

Fireblocks is a global digital asset management service provider and cryptocurrency custody security services.

Stablecoins are a type of cryptocurrency designed to have a stable value, often pegged to real-world assets, such as the U.S. dollar. Unlike other highly volatile cryptocurrencies including Bitcoin or Ethereum, stablecoins seek to maintain a consistent value, making them more practical for everyday use, such as transactions, savings, and investments.

They make fast and low-cost international transfers, function as a store of value in the crypto market, and can be used in decentralized finance (DeFi) applications. DeFi is built on blockchain technology, seeking to improve upon centralized intermediaries like banks, brokers, or other financial institutions.

Why stablecoins?

The reign of the U.S. dollar places Korean exporters at an advantage, but only to the extent that Korea remains the second-largest trading partner of the world’s largest economy.

This is not helpful for the Korea-China relationship.

A trade imbalance lingers since China exports more to Korea than it imports. The U.S. dollar's dominance in global trade doesn't necessarily benefit this imbalance with China, where local currency exchange and trade policies could play a bigger role in determining trade outcomes.

Also in the mix is Korea facing daunting trade dynamics, complicated by the U.S.-China rivalry and economic competition.

Equally challenging are Korea's strict foreign exchange (FX) rules that can limit the flexibility of companies, particularly smaller ones required to stick to complex procedures or bear higher costs for currency conversion and international transactions.

Partnerships

Fireblocks seeks to facilitate the establishment of digital currency exchange-traded funds (ETF), tokenization of liabilities and payments using stablecoins.

In January, Fireblocks signed a memorandum of understanding (MOU) with Shinhan Securities to conduct a joint research project to develop Korea’s first spot bitcoin ETF.

It also signed an MOU with NH NongHyup Bank to develop a prototype for tax refunds using the Fireblocks Tokenization Engine. This was a pilot project to refund value-added tax and goods and services tax on purchases at retail outlets.

"Fireblocks is already working with Shinhan Investment and Securities to conduct a joint research project to develop South Korea’s first Bitcoin spot ETF, as well as NH Bank to develop a blockchain-powered prototype for VAT refunds using tokenisation," she said.

"Although unrelated to stablecoins specifically, this demonstrates Korean institutions’ confidence in the future of crypto and blockchain, seeing them not just as speculative investments but as valuable tools for transforming traditional financial systems and creating new business opportunities."

In mid-February, the Financial Services Commission (FSC) Chairman Kim Byoung-hwan, the county’s top financial regulator, urged quick decisions to regulate stablecoins, especially as the country considers removing a 2017 ban on corporates accessing digital currency markets.

Financial regulators said last year that they would mandate the reporting of cross-border transactions from late 2025, as the government clamps down on tax evasion and illicit activities. This means that some 3,500 corporates will be eligible to take part in a pilot, which leaves out financial institutions but includes listed and registered companies.

"The FSC has emphasised that stablecoins should comply with financial regulations that govern electronic payments and securities," she said.

"They have also focused on ensuring that stablecoins are transparent and that their backing is fully disclosed to protect consumers. Institutions require a predictable legal framework to mitigate risks before integrating stablecoins into their operations or offering them to customers."