The Prospects and Challenges of Korean Won Stablecoins in the K-pop Field

Recently, the topic of stablecoins denominated in Korean won has sparked widespread discussion. Some people question whether Korean won stablecoins can find their place in the US dollar-dominated stablecoin market.

Some South Korean lawmakers and industry figures have suggested that transactions related to Korean pop music (K-pop) could be a potential application scenario for the Korean won stablecoin. They propose that K-pop platforms adopt a won-backed stablecoin so that global fans can more easily make purchases or buy concert tickets.

A member of parliament stated at an economic policy seminar: "If dollar-denominated stablecoins dominate the market, the Korean won may be marginalized. To maintain part of the payment ecosystem, we should allow globally influential content and products to transact using stablecoins pegged to the Korean won."

A stablecoin is a type of cryptocurrency that is pegged to a fiat currency or other real-world assets, designed to minimize price volatility. They enable around-the-clock, low-cost instant transfers without the need for traditional financial intermediaries. Stablecoins are particularly advantageous in cross-border transactions and withdrawals.

With the United States passing relevant legislation to include stablecoins in the regulatory framework, the application prospects for stablecoins are expected to further expand.

Supporters of using stablecoins for K-pop payments believe that a stablecoin backed by the Korean won could significantly improve South Korea's cross-border payment infrastructure. A research analyst stated: "Stablecoins can simplify the payment process for overseas customers and eliminate the common remittance and currency exchange barriers when accessing Korean content."

International K-pop fans also acknowledge the shortcomings of the current payment systems. They reported to the media that some websites and applications do not accept foreign-issued bank cards, especially services that require identity verification. In addition, the payment systems often crash during peak times, such as when concert tickets go on sale.

If a stablecoin system is adopted, fans can purchase stablecoins denominated in Korean won through cryptocurrency exchanges and directly send them to the purchase account, thereby completing transactions more efficiently.

The benefits of this system are obvious for suppliers. Once widely adopted, it can save on foreign exchange fees and high transaction costs paid to traditional payment networks, enhancing profitability.

In addition, there is the possibility of extra revenue generation. For example, if a large entertainment company launches its own stablecoin and sells merchandise directly to fans using it, the company could earn interest from the funds preloaded in users' wallets, similar to the stored value card model of certain chain coffee shops.

However, for consumers, this incentive may not be strong enough—unless certain products are sold exclusively through stablecoins supported by the Korean won.

Although current payment systems can be frustrating at times, they are not completely unusable. Some globally popular platforms have introduced various international payment methods.

In addition, a large portion of the public is still unfamiliar with cryptocurrencies. If the introduction is not done properly, the stablecoin system may be more complicated than traditional payment methods.

A senior research analyst pointed out: "The core advantage of stablecoins lies in eliminating unnecessary intermediaries in the financial system. The key is to ensure that consumers do not need to manually convert to stablecoins, allowing for a seamless process that does not affect user experience."

While some international K-pop fans are interested in the idea of changing the payment experience, others have expressed hesitation. Most people stated that they had never heard of stablecoins before.

An overseas fan compared this move to the previous craze of NFT projects in the Korean pop music industry, which ultimately failed. "They think K-pop fans are easy to market to, but we are more discerning," said the fan.

Another fan questioned whether policymakers truly understand the fan experience. "The government should abandon the idea that 'as long as it's built, fans will participate.' We can't help but ask if the decision-makers have ever bought tickets to a K-pop concert themselves."

Currently, this is still just a concept. Some political parties in South Korea have started to promote legislation to officially establish a stablecoin framework based on the Korean won, but specific guidelines have yet to be determined.

A research analyst stated: "A currency limited to a single industry, rather than widely applied across various sectors, is unlikely to achieve economies of scale. It is important to consider what tangible benefits a won-backed stablecoin can bring to the South Korean economy, rather than focusing solely on a single use case."