[Contribution] Expanding Trade Territories and the Won Stablecoin: A Chance to Reshape the Game

[Block Media] Domestic small and medium-sized enterprises are doing their utmost to sell even one more product on the global stage, including Southeast Asia, despite difficult conditions. The inefficiency of cross-border trade payments they encounter in this process is far too harsh for small and medium-sized enterprises to bear.

The traditional SWIFT payment procedure, where importers convert their local currency to dollars for remittance and then convert it back to won, is exceedingly complicated. Settlement delays can extend to over a week due to intermediary banks, and high fees exceeding 4% often return as burdens on the companies.

An even more painful reality emerges in transactions with buyers from underdeveloped countries. There have been cases where an importer in Laos earnestly requested to pay a $10,000 export payment in ten installments of $1,000 each because they could not pay the full amount at once. This was due to a structural limitation where local banks were out of dollars, forcing small businesses to struggle to obtain expensive dollars from the black market to make payments. They had to witness the tragedy of trade transactions coming to a standstill simply because they lacked the global reserve currency, the dollar, despite having sufficient ability to pay in their local currency.

Faced with such dire limitations, after intense deliberation on efficient payment solutions, they finally found the answer in blockchain-based stablecoins. In the midst of a massive upheaval where global supply chains are becoming fully digitalized, the outdated rules of traditional finance can no longer keep pace with the rapid changes in the market.

Today, overseas workers are already remitting stablecoins to their families via smartphone apps as easily as sending a photo, and citizens in South America are routinely converting their salaries into US dollar-pegged stablecoins (USDT) instead of facing depreciation of their local currency. This is not just an improvement in financial convenience; it is a clear signal that the fundamental nature of money is changing and a historical demand for a new form of currency that blockchain can understand and transmit.

Can small and medium-sized enterprises or new startups lead such changes? Can we entrust them with the highly financial activity of cross-border transactions? As they strive to solve the trade payment difficulties of small and medium-sized enterprises with won stablecoins, they encounter significant barriers.

If evaluated by technological capability, there is nothing to say. The responses from large banks, financial authorities, and government consultants supporting startups have been "Don't do it; wait." What they learned from experience while doing business domestically is that if you wait, the substance will be taken by existing large companies.

It is understandable that large technology companies and large financial institutions are needed. However, to win a war, infantry is essential. While missiles, fighter jets, and destroyers may win battles, they do not guarantee victory in war.

The same applies to the global competition to seize digital financial territory. Traditional financial systems centered around banks and the innovative capabilities of fintech companies cannot survive in the global market if they reject each other. Both sides must maximize their respective specialties and unite under the grand goal of national interest.

If we do not even give small startups a chance, innovation cannot be achieved.

Currently, South Korea is missing the golden time for the legislation of stablecoins. Amid delays in the enactment of the Digital Asset Basic Law and regulatory gaps, Europe and Japan have already passed related laws, and the United States is also actively expanding its stablecoin ecosystem following the passage of legislation last year.

In this grave situation, there is a national issue we must keep in mind. Now is not the time for us to divide internally; it is the time to look outward together and exert all efforts to seize global standards.

Some raise concerns that the spread of private stablecoins could adversely affect central banks' monetary policy formulation or monetary sovereignty. However, to preserve the real value of stablecoins, it is inevitable that safe fiat currency reserves must be deposited as backing assets.

This ultimately means that the intervention and collaboration of the Bank of Korea or commercial banks, which possess the highest capabilities in anti-money laundering (AML) and asset protection, are essential. In other words, regardless of who the issuing entity is, if a safe issuance system is established, they will inevitably have to form a consortium with commercial banks or collaborate closely at any stage.

Therefore, rather than being trapped in the limited thinking of "who will lead and who will be given the opportunity to issue first," it is important to assign and distribute roles based on "qualitative standards" such as transparency of backing assets, disclosure obligations, and consumer protection systems.

On the road to a future that no one has traveled, there can be no vested interests or hierarchies. If our financial authorities create a tilted playing field by being solely fixated on stability and strictly limiting issuing entities, the South Korean economy will forever fall to the periphery of the digital dollar ecosystem.

The government must allow equal opportunities for all: the bank-centered "stability model," the "usability model" of qualified private enterprises, and the "innovation model" led by innovative fintech. In a fair opportunity environment, national capabilities should be concentrated on groups that prove their capabilities and stand out through market competition.

If some are allowed to enter the new game and others are told not to, is that really a new game?

The future where South Korea, a major exporting country, does not fall behind in the competition for digital currency leadership and seizes global territory will only open when the government, traditional financial sector, and fintech companies join hands and move forward together. The technological preparations are complete. Now is the time for decisive action.