Lee Yeon-woo is a financial journalist at The Korea Times. Her wide range of reporting includes policies, macroeconomics, stock market, companies and even crypto. She is passionate about connecting the dots in Korean finance and making it easier for foreign nationals to understand. Based on her previous experience as a national reporter, she also has a keen interest in social issues within the sector, including gender equality and ESG. Your tips and insights are always appreciated. You can send them to yanu@koreatimes.co.kr.
Will global K-pop fans embrace Korean stablecoins for payments?
Albums and posters are displayed at a K-pop-related festival in Seoul, June 19. Yonhap
By Lee Yeon-woo
While providers may have clear economic incentives, benefits are far less obvious for consumers
As momentum builds around the introduction of Korean won-based stablecoins, skepticism is rising just as quickly. Some are questioning whether there's a competitive edge to be found in the face of dollar-dominated alternatives.
One proposed use case — supported by lawmakers from the Democratic Party of Korea (DPK) and some industry officials — is in K-pop-related transactions.
They suggest that K-pop platforms adopt won-backed stablecoins to allow global fans to make purchases or buy concert tickets more easily.
"If dollar-based stablecoins flood the market, the Korean won could be pushed out of use," Rep. Min Byoung-dug said at an economic policy seminar organized by the DPK on Tuesday.
"To protect even a portion of the payment ecosystem, we should enable transactions for globally influential content and platforms, such as BTS and Galaxy smartphones, using Korean won-based stablecoins."
Stablecoins are cryptocurrencies pegged to real-world assets such as fiat currencies or government bonds to minimize volatility. They allow for instant, 24/7 transfers with minimal fees. Intermediaries, such as banks or credit card companies, would not be necessary. It could particularly be useful for cross-border transactions and withdrawals.
Their potential applications are expected to expand, especially now that the U.S. has formally integrated stablecoins into its regulatory framework via the "Genius Act" passed on Friday.
Supporters of stablecoins for K-pop payments argue that a won-backed stablecoin could significantly improve Korea's cross-border payment infrastructure.
"Stablecoins could simplify the payment process for overseas customers by removing the usual hassles of remittance and currency conversion when accessing Korean content," said Declan Kim, a research analyst at DeSpread.
K-pop star Rosé of BLACKPINK performs at the Incheon Asiad Main Stadium in Incheon, June 28. AFP-Yonhap
International K-pop fans agree that the current system has its flaws. They told The Korea Times that some websites and apps don't accept foreign-issued cards — especially for services that require identity verification. In addition, payment systems often crash during high-traffic periods, such as concert ticket releases.
If the system is adopted, users could complete transactions more efficiently by purchasing won-based stablecoins through a cryptocurrency exchange and sending them directly to the place of purchase.
For providers, the upside is compelling. Once the system becomes well-established, profitability could improve by eliminating foreign exchange fees and high transaction charges previously paid to networks like Visa.
There's also the potential for additional revenue. Imagine a scenario where SMTOWN launches its own stablecoin — say, SMKRW — and uses it to sell merchandise directly to fans. The company could earn interest on the preloaded funds held in users' wallets, much like Starbucks does with its stored-value cards.
But for consumers, the incentive may not be strong enough — unless certain products are sold exclusively through won-backed stablecoins.
The current payment process can sometimes be frustrating, but it's not impossible to use. Globally popular platforms like Weverse have already introduced a variety of international payment methods.
Additionally, while those in the financial world often forget, a large portion of the public remains unfamiliar with cryptocurrencies. If not introduced thoughtfully, stablecoin systems could end up feeling more cumbersome than the traditional options they aim to replace.
"The core advantage of stablecoins is their ability to eliminate unnecessary intermediaries in the financial system," said Ryan Yoon, a senior research analyst at Tiger Research. "The most critical factor is ensuring that consumers aren't required to manually convert to stablecoins. Instead, this process should be seamless and hidden from the user experience."
Teenagers practice a K-pop dance routine in a street near the Red Square in Moscow, July 1. AP-Yonhap
While some international K-pop fans say they're intrigued by the idea of transforming the payment experience, others express hesitation. Most said they had never heard of stablecoins until the concept was explained by this reporter.
A fan from the Philippines likened the initiative to the earlier rush of NFT projects in the K-pop industry, which failed to gain traction. "They think K-pop fans are easy to market to, but we're more meticulous," she said.
Another fan questioned whether policymakers truly understand the fan experience. "The government should let go of the idea that 'if they build it, we will come,'" she said. "One has to wonder if decision makers have ever tried buying tickets to a K-pop concert themselves."
Love it or not, for now, it's still just an idea. The DPK has initiated legislative efforts to formalize the won-based stablecoin framework, but detailed guidelines have yet to be confirmed.
"A currency restricted to a single industry, rather than being used broadly across sectors, is unlikely to achieve economies of scale," said Jay Jo, another senior research analyst at Tiger Research. "It's important to consider what tangible benefits the won-backed stablecoin can offer to the Korean economy, rather than just focusing on a single use case."