Hassan Ahmed, Coinbase's Singapore Country Director, told the Korea Herald on May 5 that concerns about foreign exchange risks from a Korean won-backed stablecoin are overstated. His argument: a KRW stablecoin should be built for domestic payments, not positioned as a challenger to dollar-denominated tokens in cross-border markets. The remarks land as South Korea's legislature prepares to pass its first formal stablecoin law and at least six entities, including traditional banks, fintechs, and tech platforms, race to be first to market with a regulated won-pegged product.

Ahmed's core position is that a won stablecoin and dollar stablecoins would serve different purposes rather than compete directly. "A more effective approach may be to position it alongside dollar stablecoins, with each serving distinct but complementary functions," he said. His reasoning tracks with the structural reality of the global market: dollar-pegged tokens account for roughly 98% of total stablecoin supply, according to Bank for International Settlements data. USDT and USDC alone hold around 93% of the stablecoin market (Crystal Intelligence, Q3 2025). A KRW-pegged token launching into that landscape has no realistic path to cross-border dominance in the near term.

The more pressing concern Ahmed identifies is not which currency backs a stablecoin, but whether the regulatory scaffolding around it is credible enough for institutions to commit capital. "The biggest hurdle is trust infrastructure. Institutions require clarity on regulatory standards, risk and settlement finality before they will commit capital at scale," he said. South Korea's Digital Asset Basic Act, expected to pass this year, would require 100% liquid reserve backing for stablecoin issuers, alongside a licensing regime with minimum capital thresholds ranging from roughly $364,000 for fintech companies to $3.6 million for bank-backed issuers. The bill has been delayed by a jurisdictional dispute between the Financial Services Commission and the Bank of Korea over who oversees reserve requirements. The Bank of Korea has taken a specific substantive position in that dispute, lobbying for banks to serve as the exclusive early issuers through a staged rollout before any broader expansion to other entities. That stance helps explain why the disagreement has proven difficult to resolve and why it bears directly on the six-entity race now forming in the private sector.

On the ground, won-backed tokens are already live. BDACS and Woori Bank launched KRW1, the first fully collateralized won-backed stablecoin, on the Avalanche blockchain in September 2025. A separate product called KRWQ launched on Base (an Ethereum layer-2 network) in October 2025, targeting global DeFi (decentralized finance) liquidity rather than Korean retail users. Neither has achieved meaningful distribution so far. Meanwhile, six separate consortia are competing to issue the first regulated KRW stablecoin once the legal framework clears. The field includes BDACS and Woori Bank, already in market with KRW1; Kakao partnering with its Kaia blockchain; Naver Financial teaming with Upbit operator Dunamu; fintech giant Toss; a coalition of eight banks, including KB Kookmin, Shinhan, and international institutions such as Citibank Korea and Standard Chartered First Bank Korea; and Coupang's payments arm, Coupang Pay, which estimates stablecoin settlement could cut its annual payment costs by approximately $200 million.

The urgency behind those bids is partly explained by the scale of dollar stablecoin demand inside Korea. In the first quarter of 2025 alone, South Korean exchanges transferred the equivalent of roughly $41.5 billion in crypto overseas, and dollar-pegged stablecoins made up 47.3% of those outflows. Over the full year 2025, an estimated $110 billion in crypto left the country. USDT has persistently traded at about a 5% premium on Korean exchanges above its global price, a gap that reflects intense domestic demand for dollar exposure colliding with Korea's capital controls. That premium, while seemingly modest today, is a normalised version of a long-standing structural phenomenon: the so-called Kimchi premium peaked at 54.5% in 2017 and has remained a recurring feature of Korean crypto markets in the years since. Won deposits on domestic exchanges rose 31% to 8.1 trillion won over 2025, a sign of deepening domestic capital engagement that lends support to Ahmed's case for a domestically focused stablecoin. South Korea's total virtual asset market stood at 87.2 trillion won (approximately $59 billion) at the end of 2025. Two separate counts place the retail user base in different ranges: the Korea Herald reports approximately 11.13 million active crypto users, while the Korea Times puts the number of retail crypto holders at roughly 18 million, or about one-third of South Korea's population. The two figures likely reflect different definitions, distinguishing actively trading accounts from all registered or holding accounts, and the gap is worth bearing in mind when evaluating market-size claims. On the activity side, those users generated average daily transaction volumes of 5.4 trillion won, roughly one-third of the Kospi stock index's average daily trading value.

Bank of Korea Governor Lee Chang-yong has been direct about his concerns. "Many people might take the won stablecoin abroad, which is worrisome," he said in October 2025. He added: "If foreign exchange outflows are well controlled, then we can expand." (AJU Press, October 2025.) His position is that the bank should retain strict control over any rollout and expand access only after proving outflows are contained.

Those concerns are not without empirical backing. A March 2026 BIS working paper (No. 1340), published after Ahmed gave his Korea Herald interview, found that a 1% exogenous increase in stablecoin inflows raises covered interest parity deviations by 40 basis points and depreciates the local currency in spot foreign exchange markets. Critically, those findings apply to dollar stablecoin demand specifically, which provides partial support for Ahmed's broader argument. Ahmed contends that the mechanism is materially different when the stablecoin is denominated in the domestic currency, a distinction that is central to his case for treating won-backed and dollar-backed tokens as separate regulatory questions. The BIS paper does not explicitly model that scenario, so the inference remains Ahmed's argument rather than a settled empirical finding.

The Korea debate carries direct implications for builders and policymakers across South Asia, India, and Africa, where dollar stablecoin demand is entrenched for similar structural reasons: currency instability, capital controls, and a lack of regulated local alternatives. India is among the most directly analogous cases; the Reserve Bank of India's concerns about stablecoin-driven capital outflows closely mirror the Bank of Korea's position, and policymakers in New Delhi may use Korea's regulatory experience as a template in their own CBDC and stablecoin deliberations. In markets such as Lagos, Nairobi, Dhaka, and Mumbai, Ahmed's framing inverts: dollar stablecoins already dominate domestic payment use cases, not just cross-border ones. The trust infrastructure gap Ahmed identifies in Korea is, if anything, wider across those markets. Korea's slow legislative progress offers those regions a live case study to adapt, though the lesson may ultimately be that regulatory groundwork takes longer than any product roadmap anticipates.