Korea's Big Move: Tech Giants Battle to Create Their Own Digital Money
South Korea is making significant strides in the digital currency arena. Two of its largest tech companies, KakaoBank and Naver, are in a race to create their own stablecoins, digital currencies tied to the Korean won.
A Race to Reduce Dollar Dependency
This isn't just a corporate competition; it's a national effort to reduce reliance on the U.S. dollar in digital finance.
KakaoBank's Ambitious Plans
- Hiring blockchain developers
- Filing trademarks for potential stablecoin names
- Leveraging KakaoPay, which has 42 million users
Naver's Strategic Move
- Merging with Dunamu, the company behind Upbit, South Korea's largest cryptocurrency exchange
- NaverPay has 30 million monthly users
Government Support
President Lee Jae-myung sees stablecoins as a way to protect financial independence. Currently, many South Koreans use dollar-pegged stablecoins, which weakens the Korean won's ecosystem.
Regulatory Challenges
- The Bank of Korea wants banks to own at least 51% of any stablecoin issuer.
- Several bills have been proposed but have not progressed much.
Potential Impact
If successful, these stablecoins could be used by millions for everyday payments, unlike in the West, where stablecoins are mostly used for cryptocurrency trading.
Global Context
- The U.S. has passed laws to regulate stablecoins.
- Japan is preparing to approve a yen-pegged stablecoin.
- Major financial firms like BlackRock and Citigroup are also entering the market.
KakaoBank's aggressive hiring suggests a possible stablecoin launch within the next year, potentially setting a precedent for how countries can use blockchain technology to strengthen their currencies.
