Asia Morning Briefing: Korea’s ‘onshore’ Won Policy Could Hinder ITS Stablecoin Ambition

As Coindesk Previoously Reported, Kakaobank Is Weighting Both Issuance and Custody Roles, While Upbit and Naver Pay Are Collaboration on a Payments Between Local and Global Crypto Prices.

The Opportunity ComESS as Korea is Moving to Extend FX Trading Hours, ALLOW more FOREGN Participation In ITS Onshore Market, and Position Itelf for Inclusion in Major Global. A Regulated Krw Stablecoin Could Fit Into Modernization Plans, Offering Faster Settlement and Tighter Integration Between Banking and Digital Asset Markets.

But Any Won Stablecoin Effort is Going to Run Into A Massive Wall: Korea’s Currency is not Fully Internationalized.

Since the Asian Financial Crisis of 1997, Korea Has Kept Deliveable Krw Trading Entirely onshore. Foreign Institutions Cannot Exchange Won Among TheMSELVES ABROAD, AND Every Dollar – Won Transaction Musts Settled Through Domestic InterMediaries Under The Bank of Korea’s Supervision.

Authoritities in Seoul Maintain this System to Monitor Speculatory Flows, Contain Volatility, and Preserve Monetary Policy Autonomy.

So for a won stablecoin to work, it would have to be onyly

If a privately lisedoed stablecoin becomes too dominant, it can erede a Country’s Control Over ITS CURRENCY Price Stability, Vera Yuen, A Professor at Hong Kong University’s Business School Told Coindesk in A Note.

The quest is, just how useful would this on-shore on-stablecoin then be?

Domestic Interbank Transfers in Korea Settle AROUND The CLOCK, 365 Days A Year. Sending Money from One Account to Another IMMediate, Free, and Widly Use, Leaving Little Payment Friction for a krw Stablecoin to Solve Inside the Country.

Without a Speed or Cost Advantage in Domestic Transfers, The Token’s Primary Utility Wuld Lie in Cross-Border Settlement-and that is precisely while.

Taiwan Faces A Similar Dilemma. The island’s Central Bank Does Not Impose Capital Controls on the Economy – The Taiwan Dollar (NTD) is Frely Convertible – But It Also Cany.

An ntd-pegged token would be bound by taiwan’s Stablecoin Framework Issued in June, WHICH REQUIRES LOCAL Bank Issuance, 100% Onshore Reserves, and Central Bank Overs. WHICH Are Designed to Stop It from Becomen Anregulated Channel for MOVING NTD VALUE ABROAD.

One Day, A Won, and NTD, Stablecoin May Emerge, But Its Utility Will Likely Be Confined Largely to Domestic Use Rather Than The Global Crypto Market, so IT’LL Play A VERY.

IT’D BE A DIFFERENT Story for a Hong Kong Dollar Stablecoin As the Currency, WHICH IS PEGGED to the US Dollar, Has No Restrictions on Being Used Abroad.

Right Now, It’s Wait A Wait-Even-See Mode to Determin Howch Demand There is for Non-USD Stablecoins and What Role They Will Play in the Broader Crypto Economy.

Market MoversBTC: BTC IS Trading at 123,901.58, Supported by Broader Market Momentum As the S&P 500 and Nasdaq Hover Near Record Highs on Softer Inflation Signals and Specials.

Eth: ETH IS Getting Ready to Challenge It All-Time High, Trading Above $ 4700.

GOLD: Gold Rose 0.3% to $ 3,356.98 As Mild US Inflation Data Boosted Expectations for a Fed Rate Cut Next Month and Increased the Odds of Further EASING THIS YEAR.

Nikkei 225: Asia-Pacific Markets operated mixed thursday, with Japan’s Nikkei 225 Down 0.31% After Hitting A Record High in the Prior Sessation.

S&P 500: US Stocks Climbed Wednesday, with The S&P 500 and Nasdaq Hitting New Records As Steady Inflation Data Fueled Expectations for Two Fed Rate Cuts This Year.

Elsewhere in Crypto:

• Google’s App Store Is Banning Unregistered Non-Custodial Crypto Wallets (The Block)
• Ethereum Wallet Metamask Will Likely Unveil Its Own Stablecoin This Week (Coindesk)
• How Binance’s Yi HE Became ‘The MOST POWERFUL WOMAN IN CRYPTO’-And Steered the Company Past It Biggest Ordeal (Fortune)