Korean card firms scramble to maintain footing amid won-based stablecoin push
Rep. Min Byoung-dug of the ruling Democratic Party of Korea speaks at a forum at the National Assembly in Seoul, Tuesday, about global digital finance strategies involving the introduction of won-based stablecoins. Yonhap
The credit card industry is forming a joint task force and taking other measures in response to a perceived threat to its position in the payments market amid growing discussions of the introduction of won-based stablecoins and related legislation, industry officials said Thursday.
Stablecoins are digital currencies designed to maintain a stable value by being tied to central bank-issued currencies, such as the U.S. dollar, or to physical assets like gold.
As the promotion of won-based stablecoins was one of President Lee Jae Myung's campaign pledges, a related subcommittee has been established within the presidential state affairs committee. The ruling Democratic Party of Korea is also set to announce a bill on the issuance and operation of won-based stablecoins.
According to financial industry officials, the Credit Finance Association and eight major credit card companies plan to form a task force on stablecoins and hold its inaugural meeting next week.
The task force is expected to explore how the card industry should navigate the potential legalization of stablecoins and what role companies can play within the evolving digital payment ecosystem.
Many in the industry believe that the institutionalization of stablecoins could fundamentally alter the structure of the payments market, raising concerns that it could undermine the competitiveness of credit card companies.
Unlike traditional card-based transactions, stablecoin payments could allow consumers to pay merchants directly without intermediaries such as payment gateways or value-added network operators, potentially diminishing the role of card issuers.
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To address these concerns, card companies also intend to submit a request to financial authorities through the task force to be included in the operation and transaction processes of stablecoins.
Currently, card issuers are only allowed to engage in business activities explicitly outlined in the Specialized Credit Finance Business Act.
The task force participants are expected to ask authorities to categorize stablecoin-related services as either permissible ancillary or incidental business activities.
Efforts are also underway to secure trademarks related to stablecoin initiatives.
On July 18, Lotte Card submitted 36 trademark applications for won-based stablecoins.
"Won-based stablecoins have the potential to be widely used in transactions involving high-value assets such as used cars, luxury goods, real estate and gold," a Lotte Card official said. "Leveraging our extensive distribution network and prepaid platform services for foreign tourists, we are eyeing entry into the stablecoin market."
Earlier, Shinhan Card registered eight stablecoin-related trademarks on June 27, becoming the first among local issuers to do so. Following suit, KB Kookmin Card filed 35 applications, while Woori Card submitted nine.
BC Card has launched an internal team dedicated to tracking trends in both the domestic and international stablecoin markets.
The Credit Finance Association, meanwhile, has been hosting a series of educational sessions since last week, inviting guest speakers to brief staff from the association and member card companies on stablecoin developments.
"Since there is no set regulatory direction yet, we’re not treating stablecoins purely as a threat," an association official said. "We are keeping various business opportunities on the table and exploring potential paths forward."