Good morning, Asia. Here’s what makes news in the markets:
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South Korea’s decision to pay tribute to its central bank’s digital currency mold in favor of the private sector StableCoins has given rise to a wave of activities among fintechs and banks.
As Coindesk previously reported, Kocaobank weighs both issuing and custody roles, while Upbit and Naver salary collaborates on a payment-focused token that can help close the “Kimchi Premium” gap between local and global crypto prices.
The opportunity comes as Korea moves to extend, for example, trade times, enables more foreign participation in its onshore market and positions itself for admission to larger global bond and stock index. A regulated KRW StableCoin could fit into these modernization plans and offer faster settlement and tighter integration between banking and digital asset markets.
But anyone won stableecoin efforts will run into a massive wall: Korea’s currency is not fully internationalized.
Since the Asian financial crisis in 1997, Korea Holdt has delivered Krw Trade completely on land. Foreign institutions cannot exchange won abroad, and every dollar – Won transaction must be run through domestic intermediaries under the Bank of Korea’s supervision.
Seoul authorities maintain this system to monitor speculative streams, contain volatility and preserve monetary policy autonomy.
So, for a won stableecoin to work, it should only be used with whitened, kyc-verified addresses that have some tie for Korea.
If a privately issued stableecoin becomes too dominant, it can erode a country’s control over its currency, encourage “unintentional dollarization,” and weakens the central bank’s ability to manage employment and price stability, Vera Yuen, professor at Hong Kong University’s Business School, Coindesk in a note.
The question is, how useful would this on-shore only stableecoin?
Domestic interbank transfers in Korea settle around the clock, 365 days a year. Sending money from one account to another is immediate, free and used extensively, leaving a little payment friction for a KrW stableCoin to solve inland.
Without a speed or cost advantage in domestic transfers, the token’s primary tool would be in cross-border settlement and that is precisely where the onshore-only rule becomes a wall.
Taiwan faces a similar dilemma. The island’s central bank does not introduce capital controls on the economy – Taiwan Dollar (Ntd) is free convertible – but it can’t be used offshore either, which makes it questionable as a stablecoin.
An NTD-Pegged token would be bound by Taiwan’s stablecoin framework issued in June, which requires local banking issuance, 100% onshore reserves and central bank supervision with currency reporting designed to prevent it from becoming an unregulated channel to move the NTD value abroad.
One day, a won and NTD, stableecoin may occur, but its utility is likely to be limited to domestic use rather than the global crypto market, so it will play a very niche role.
It would be another story for a Hong Kong Dollar StableCecoin as the currency associated with the US dollar has no restrictions on being used abroad.
Right now, it’s waiting for a waiting-and-see state to determine how much demand is for non-USD stablecoins and what role they will play in the wider crypto economy.
Market Movers
BTC: BTC trades with 123,901.58, supported by a wider market momentum, as the S&P 500 and NASDAQ are hovering near record heights on softer inflation signals and speculation about bold.
ETH: ETH is getting ready to challenge its high time, trading over $ 4700.
Gold: Gold rose 0.3% to $ 3,356.98 as mild US inflation data increased expectations of a fat rate cut next month and increased the odds to further ease this year.
Nikkei 225: Markets in the Asia-Stop Sea opened mixed Thursday with Japan’s Nikkei 225 down 0.31% after hit a record high in the previous session.
S&P 500: US shares climbed Wednesday, with the S&P 500 and NASDAQ hit new items as stable inflation data burned expectations for two fat -rate cuts this year.
Elsewhere in crypto:
- Google’s App Store forbids unregistered non-parent crypto drawing books (The block)
- Ethereum Wallet Metamask will probably reveal its own stableecoin this week (Coindesk)
- How Binance’s Yi became ‘the most powerful woman in crypto’ – and controlled the business past her greatest ordeal (Assets)
