[Editorial] Who Will Guard the Digital Sovereignty of the Korean Won

“Are you not afraid of history?”

The line from the movie Gwanghae, The Man Who Became King comes back to mind. It came to me while reporting on the digital sovereignty flow of the Korean won to overseas markets.

Last month, our publication interviewed Dave Shin, COO of KRWQ. This Korean-American with Canadian citizenship—who previously worked at Lehman Brothers and Morgan Stanley—is now sitting in Singapore, designing the future of a Korean won stablecoin. His concept is to bring the Korean won NDF market, with a daily trading volume of $27 billion, onto the blockchain.

Less than a month later, MoonPay joined forces with Woori Bank. This global company, certified under EU MiCA and holding a New York BitLicense, co-founded the Korean won stablecoin alliance with one of South Korea’s four major commercial banks. I reported on scenes of Korean won tokenization one after another, with excitement and bitterness rising at the same time. Because the main protagonist of Korean won tokenization is not South Korea.

KRWQ believes that trading is the answer. Bringing institutional capital from the Korean won NDF market onto the chain is the reason it exists. MoonPay, on the other hand, is almost the opposite: it formed a banking alliance, focusing on remittances, merchant payments, and cross-border settlement. Who is right and who is wrong will be judged by the market. What’s worth paying attention to now is something else entirely: both projects began outside South Korea’s regulatory system.

Numbers are cold. According to Chainalysis data, as of June 2025, over the course of the prior one year, the trading volume of Korean stablecoins denominated in Korean won is about $64 billion. South Koreans are already using stablecoins—only they are using U.S.-dollar stablecoins, not Korean-won stablecoins. KRWQ accumulates reserves offshore in government bonds held in custody by Shinhan Securities, USDC, and frxUSD, and makes this information publicly available through real-time dashboards. MoonPay, meanwhile, enters South Korea with regulatory approvals from the EU, the U.S., the U.K., and Australia. During this period, domestic candidates for issuing Korean won stablecoins can only wait for legislation to pass. KB Financial set up a dedicated task force, and Shinhan Bank launched CBDC pilot projects, but without legislation, it is impossible to take even a step forward. And no one knows when that legislation will pass.

Korean won stablecoins are not fintech products. This is a question of who designed the channels for the international circulation of the Korean won; it is a question of who created the demand for Korean-won-denominated government bonds; it is a question of who first accumulated data on Korean-won capital flows. In one sentence: this is a question of monetary sovereignty.

In the interview, Dave Shin said, “A Korean won stablecoin with ample liquidity can create structural demand for Korean government bonds, thereby lowering borrowing costs. This benefits the government, businesses, and every Korean person.” Perhaps that is an exaggeration. But what needs deep thought is that this vision is being put into practice by a Korean-American in Singapore. Lee Fook-jen, MoonPay’s head of APAC, said, “We will ensure that Korean stablecoins are available worldwide and can work seamlessly with each other.” This is a declaration to lay down a global digital track for the Korean won. If the South Korean government does not lay it out, foreign companies will.

It feels strangely familiar. Back in 2017, when the government comprehensively banned ICOs, Korean blockchain companies set up foundations in Singapore and Switzerland to issue tokens, and then listed and circulated them on domestic exchanges. Because there was no law, the funds flowed overseas. Now, Korean won stablecoins are playing out the same story. IQ and Frax issued KRWQ in the Cayman Islands, and MoonPay partnered with Korean banks while holding global licenses. This is the ICO déjà vu created by regulatory gaps.

Some may point the finger at Shinhan Securities, which holds KRWQ’s government bonds in trust, and at Woori Bank and MoonPay for forming an alliance. But that is not the banks’ fault. When global projects propose cooperation, it is natural for banks to accept. In the absence of a domestic framework for issuing Korean won stablecoins, banks are simply carrying out their role within the existing regulatory structure.

What should be questioned instead are domestic fintech and blockchain companies. Do they really have to come to a standstill just because there is nothing they can rely on? While MoonPay got EU MiCA approval first and while KRWQ accumulated reserve data offshore, why aren’t domestic companies developing overseas strategies? Korean companies that knew how to go global during the ICO wave of 2017 are now, on the stablecoin issue, only fixated on domestic legislation—staying stuck in place. Waiting to be regulated and being trapped by regulation are two different things.

This publication is not arguing that regulation is useless. Concerns about evading capital controls and the risk of bank runs do exist. However, if the “debate over risk prevention” leads to the “reality of missing opportunities,” then that is the greatest risk of all. Whether it is the 51% rule or fintech openness, decisions have to be made. If there is no perfect answer, even opening a regulatory sandbox first is better. “How it works” is more urgent than “who issues it.”

KRWQ and MoonPay only prove one thing: demand for Korean won stablecoins already exists. Should South Korea meet that demand at home, or should it hand it over to overseas entities? This is not a fintech policy issue—it is a monetary sovereignty issue. Time still exists to safeguard the digital sovereignty of the Korean won, but that time is passing faster than we think.