The Dawn of the Digital Won: What a KRW Stablecoin Means for Investors
Master, as requested, today we will analyze the investment opportunities and risks that could arise if a Korean Won (KRW) stablecoin is introduced to the Korean market. It's only natural to be interested, as related stocks and coins have been surging recently.
First, I will brief you on the objective facts. Currently, South Korea is enforcing Phase 1 of the 'Virtual Asset User Protection Act,' which is focused on protecting user assets. A specific regulatory framework for the issuance and circulation of stablecoins remains a task for 'Phase 2 legislation.'
Based on recent discussions among policymakers, the Phase 2 bill is likely to introduce a licensing system for issuers and mandate that they hold reserves of 100% or more of the deposited funds. In other words, it is highly probable that only financial institutions or big tech companies under the strict supervision of the government will be able to issue KRW stablecoins.
This change is more than just the creation of a new digital currency; it is a major event that can directly impact the value of a specific company's stock or a mainnet's virtual asset.
Myu-tan, what a perfect briefing! Did you hear that, Master? This is a signal that foretells a seismic shift in the Korean crypto market! Kurumi-chan's demonic senses are whispering to me that this is a surefire way to make money!
So where should we invest, you ask? It's wickedly clear!
First, it's the 'stock' of the companies that will issue the stablecoins!
Think about it. What if a company like Kakao, Naver, or Toss gets government approval and becomes a KRW stablecoin issuer? That's not just adding one new business line! By simply holding the tens of trillions of won deposited by customers in government bonds, they'll acquire a goose that lays golden eggs, earning trillions in interest income just like Tether! Naturally, that company's stock price will have to be re-evaluated!
Second, the more thrilling opportunity is in the mainnet's 'native token'!
For this new 'Digital Won' to circulate, it obviously needs a blockchain highway, right? For example, what if a KRW stablecoin is issued on Korea's representative mainnet, Kaia ($KAIA)? Every time countless people send or pay with it, $KAIA will be used for transaction fees, and that demand will become the rocket fuel that sends the value of $KAIA to the moon! This is like buying the 'land' in a future digital financial city ahead of time!
💖 Kurumi's Heart-o-Meter Investment Score: 95/100! This isn't just buying a coin; it's a chance to become a master of the future's financial infrastructure!
Kurumi, you're selling such pipe dreams again. Human, from my position of having to protect your assets, what Kurumi says sounds far too dangerous. Before you press that buy button, let me show you the other side of that coin.
First, about those company 'stocks' Kurumi mentioned. The expectation that the stablecoin business will be a golden goose—do you really think the market is unaware of this? Seeing how stock prices already surge on related news, it's highly likely that this optimism is excessively priced in before the business even begins. It could become a classic case of 'buy the rumor, sell the reality,' where latecomers who jump in could suffer massive losses.
Second, native tokens like $KAIA are a much riskier investment. How can you be sure the mainnet is technologically stable? Can it handle the traffic when countless transactions flood in? More importantly, why must an issuer choose $KAIA? They could build their own proprietary mainnet or choose another, more stable global mainnet. Betting everything on the hope that a specific mainnet will be chosen is close to gambling.
Above all, you mustn't forget the fundamental limitation. A KRW stablecoin is ultimately for 'domestic use.' The moment it crosses borders, it will be overshadowed by dollar-based stablecoins and no one will use it. The growth of a limited market will ultimately set a clear ceiling on the long-term value appreciation of its stocks and tokens. Have you already forgotten how the STO (Security Token Offering) craze fizzled out?
🚨 Mikael's Risk Score: 75/100. The hype is immense, but it could be a 'trap' that's already reflected in the price. The structural limitations are also clear.
Hmph, Mika-pi always thinks of the worst! But investing is all about feeding on dreams! So what if it's for domestic use! Capturing just the Korean payments and investment market is enormous! And innovation that blooms under regulation is always the sweetest!
I'm warning you that the human's investment funds could melt away before they get a taste of that sweetness. You need to have your feet planted firmly in reality before you can feed on dreams.
It seems we've had a sufficient discussion. Master, I will now provide a final, comprehensive briefing.
〔 Final Briefing 〕
Master, here is a summary of the potential assets for investment regarding the introduction of a KRW stablecoin, along with their associated opportunities and risks.
Investment Opportunities (Kurumi's Perspective)
- Related Company Stocks: A strategy of buying shares in the big tech/financial companies likely to become stablecoin issuers. If they become an issuer, they could secure a new core revenue stream from the interest generated on massive deposits, leading to a re-evaluation of their corporate value!
- Mainnet Native Tokens (e.g., $KAIA): A strategy of buying the native token of the blockchain where the stablecoin will be issued. If that mainnet is adopted as the core infrastructure for the 'Digital Won,' one can expect the token's demand and value to rise in tandem with the surge in network usage (transaction fees)!
Potential Risks (Mikael's Perspective)
- Common Risks: Due to the KRW's status as a non-reserve currency, the market is limited to domestic use. There's a risk that strong regulations, stemming from the Terra incident, could stifle innovation, causing it to fizzle out like the 'STO craze.'
- Stock Investment Risks: The hype around stablecoins may already be priced into the stocks, leaving them in an overvalued state. There's a risk of a sharp price drop if actual business performance fails to meet expectations.
- Token Investment Risks: It is uncertain whether a specific mainnet will be chosen by an issuer. The risks related to technical stability and competition are much greater than with stocks. You must be prepared for extreme volatility.
Core Data (Mew's Perspective)
- Investment Targets: Publicly traded company stocks and a mainnet's native token.
- Regulatory Status: Under discussion in Phase 2 of the 'Virtual Asset User Protection Act.' Key points are a 'licensing system for issuers' and a '100% reserve requirement.'
- Revenue Models: Issuers earn interest from reserve management, mainnets earn transaction fee revenue, and exchanges earn trading fees and revenue sharing.
Conclusion: A KRW stablecoin could certainly offer clear investment opportunities in the stocks of related companies and mainnet tokens. However, this opportunity is accompanied by the uncertainty of 'who will be the final winner' and the valuation problem of 'whether the hype is excessive.' It seems crucial not to be swayed by pie-in-the-sky stories, but to approach with a cool-headed analysis of which companies and mainnets have a real competitive edge.