The Prospects of Korean Won Stablecoin in the K-pop Field Spark Controversy

As the momentum for the promotion of the Korean won stablecoin continues to grow, the voices of skepticism are also rising. Some people are beginning to wonder whether the Korean won stablecoin can find its competitive advantage in the US dollar-dominated stablecoin market.

One application scenario supported by some South Korean legislators and industry professionals is in transactions related to K-pop. They proposed that K-pop platforms adopt a Korean won stablecoin so that global fans can more easily purchase merchandise or concert tickets.

At an economic policy seminar, a South Korean congressman stated: "If the market is dominated by dollar stablecoins, the Korean won may be squeezed out of circulation. To protect part of the payment ecosystem, we should allow globally influential content and platforms to use stablecoins pegged to the Korean won for transactions."

A stablecoin is a type of cryptocurrency that is pegged to real-world assets such as fiat currencies or government bonds, aimed at minimizing volatility. They enable instant, around-the-clock transfers with very low fees, without the need for intermediaries like banks or credit card companies. Stablecoins are especially useful for cross-border transactions and withdrawals.

With the United States passing relevant legislation, officially incorporating stablecoins into the regulatory framework, the potential applications of stablecoins are expected to further expand.

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

International K-pop fans also agree that there are flaws in the current payment systems. They expressed 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 traffic periods (such as concert ticket sales).

If a stablecoin system is adopted, fans can purchase Korean won stablecoins through cryptocurrency exchanges and directly send them to their purchasing accounts, thus completing transactions more efficiently.

The benefits for suppliers are very obvious. Once the system is widely adopted, it can save the foreign exchange fees and high transaction costs previously paid to major payment networks, and profitability is expected to improve.

In addition, there is potential for extra revenue. 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, just like the stored value cards of certain chain coffee shops.

But for consumers, this incentive may not be strong enough—unless certain products are sold exclusively through the Korean won stablecoin.

The current payment systems can sometimes be frustrating, but they are not unusable. Some globally popular platforms have introduced various international payment methods.

Moreover, although financial professionals often forget, a large portion of the public is still unfamiliar with cryptocurrencies. If the introduction is not appropriate, the stablecoin system may ultimately appear more cumbersome than the traditional payment methods it aims to replace.

A senior research analyst stated: "The core advantage of stablecoins lies in their ability to eliminate unnecessary intermediaries in the financial system. The most critical factor is to ensure that consumers do not have to manually convert to stablecoins, allowing for a seamless process that does not affect the user experience."

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

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

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 whether the decision-makers have ever purchased tickets to a K-pop concert."

Like it or not, this is still just an idea for now. A certain political party in South Korea has begun to push for legislation to formally establish a stablecoin framework based on the Korean won, but specific guidelines have yet to be determined.

A research analyst stated: "Currencies limited to a single industry, rather than widely applied across various industries, are 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."