Stablecoins Surge as Cards Decline: Big Tech Dominates South Korea’s Financial Shift

South Korea's financial landscape is flipping—stablecoins are eating traditional payment cards' lunch while tech giants carve out their slice.

The stablecoin takeover

Digital dollars now outpace plastic in Seoul's high-speed economy. Why? Instant settlements and zero FX friction—plus that sweet regulatory gray area everyone pretends not to notice.

Big Tech's backdoor banking play

Local fintechs scramble as KakaoPay and Naver Financial go full-throttle on crypto integrations. 'Partnerships'—read: land grabs—with exchanges give them custody, payments, and your grandma's kimchi money.

The cynical kicker

Watch regulators suddenly discover 'consumer protection concerns' just as the chaebols finish building their private blockchains. Classic case of move fast—break things—lobby harder.

High Capital Barriers For Issuers

According to reports, any stablecoin issuer must hold at least ₩1 billion (about USD 720 258) in equity capital. That rule will leave small startups on the sidelines. Only big players or deep-pocketed firms will qualify.

The MOVE comes as Democratic Party members on the National Assembly’s Political Affairs Committee prepare to roll out the bill next month. It aims to define stablecoins as “value-stable digital assets” and to lay down clear ground rules.

Pressure On Card Companies

Card providers could feel the squeeze. Based on reports from New Daily Kyungjae, experts warn that stablecoins may weaken the payment base for credit cards. That could threaten the industry’s long-term health.

Card companies are already coping with a rising loan default rate of 1.93% in Q1, nearly brushing against the 2% danger mark. Three of the biggest firms—KB Kookmin, Hana, and BC Card—have already passed 2% this year. Those figures point to trouble if some transactions shift to tokens.

The Bank of Korea isn’t sold on stablecoins. It has urged caution and warned that digital tokens might hurt the banking sector. If people start using stablecoins for daily spending, banks could lose fees and deposits.

According to the central bank, that could undercut commercial banking profits. Banks may have to rethink their plans or build their own digital services to keep customers.

While banks and card issuers fret, tech giants are lining up. Naver and Kakao have been working on blockchain projects for years. They see a chance to plug a won-backed token into their apps and services.

Hyundai HT and Hyundai Mobis are also watching closely. Other names on the list include Kocom, MediaZen, Kaon Media, and Bridgetec. Analysts suggest that a Naver stablecoin, linked with web3 services or even the Line chat app in Japan, could open new markets.

Investors have already leapt in before the vote. Home-based crypto and stock markets are abuzz. The shares of companies that have been known to look at stablecoins have surged. That indicates growing enthusiasm. But it also comes with danger—if the legislation becomes stalled or altered, prices might reverse direction.

Featured image from Unsplash, chart from TradingView