[X Bank] ⑤ What will South Korea choose

X is an unknown variable. That is how current cryptocurrency exchanges are. When you entrust your tokens, they are not kept in custody, but operated. Behind the promise of paying interest are loans, and behind loans is leverage. BIS talks about control, Washington talks about definition. Seoul has not yet made a statement. TokenPost will follow this transformation in five articles to track its essence.[Editor’s note]

■ What Chang-yong Lee Knows

President Chang-yong Lee knows everything involved in this series of reports.

The structural risks of the MCI analyzed in the BIS-FSI report, as BIS Chief Economist, he interprets them along a research extension that he personally designed and reviewed. The expansion of the dollar stablecoin ecosystem created by the CLARITY Act, and the pressure it exerts on the Korean won, he understands as a scholar who has studied international monetary order for ten years. The regulatory arbitrage leading to capital flight, he confirms as the Governor of the Bank of Korea, through the daily volatility of exchange rates he faces.

In his inaugural speech, he mentioned three points: strengthening non-bank financial regulation; a digital currency strategy centered on CBDC and deposit tokens; cautious and flexible monetary policy. He did not mention the Korean won stablecoin.

This silence is not ignorance. It is a choice. And this choice will largely determine the future of Korea’s digital finance.

■ Korea’s Current Position

The reality of Korea revealed by this series of reports is summarized as follows:

The “Virtual Asset User Protection Act” mandates the segregation and custody of entrusted assets. However, if clients voluntarily agree to participate in Earn and staking plans, those assets are outside the scope of protection. As confirmed in the second article, consent means transfer of ownership. Legal protection ends before consent.

There is a lack of a regulatory framework for lending activities. According to FSB surveys, only two countries regulate lending activities globally. Korea is not one of them. While domestic exchanges expand margin lending and derivatives services, there is no sound regulatory framework to oversee these activities.

There is no Korean won stablecoin. When the GENIUS Act in the U.S. lays the institutional foundation for dollar stablecoins, and CLARITY builds market structure on that basis, the global digital payment infrastructure will quickly solidify around the dollar. Korea’s integration into this trend depends on the digital presence of the won. Currently, this presence is almost zero.

■ Two Clocks Running Simultaneously

Korea faces two clocks.

The first is the clock of regulatory improvement. The second phase of the Virtual Asset User Protection Act is under discussion. This is about building a regulatory framework for lending, Earn plans, and derivatives. It is also the direction BIS demands. This clock moves very slowly. Legislation takes time, and conflicts among stakeholders slow progress.

The second clock is the clock of global ecosystem restructuring. If CLARITY passes the markup in April, a full assembly vote can occur in May or June. The EU’s MiCA will be authorized by July 2026. Hong Kong has issued stablecoin licenses to global banks. This clock moves very fast. Before Korea completes the first clock, the second clock will turn several more times.

The speed difference between the two clocks creates a gap in Korea.

■ Can Lee Chang-yong’s CBDC Strategy Be the Answer?

President Lee Chang-yong’s digital currency strategy is clear. Through the second phase of the “Hangang Project,” he aims to build a digital Korean won ecosystem centered on CBDC and deposit tokens. Through international cooperation projects like “Agora,” he seeks to elevate the status of the won in global payment infrastructure.

The logic of this strategy is solid. Compared to private stablecoins, CBDC controlled by the central bank better preserves monetary sovereignty. Deposit tokens circulate through the banking system, so they do not harm existing financial stability. The MCI structural risks BIS worries about can also be suppressed within a CBDC-centered system.

However, this strategy takes time. Building CBDC infrastructure is a multi-year effort. From completing the second phase of the “Hangang Project,” integrating deposit tokens into actual payment infrastructure, to connecting the Korean CBDC to the global payment network through international cooperation—during this period, dollar stablecoins may already be deeply embedded in the daily lives of hundreds of millions.

CBDC is the right direction. But if the right direction does not meet with sufficient speed, the outcome will not be right.

■ The Cost of a World Without Korean Won Stablecoins

President Lee Chang-yong’s omission of the Korean won stablecoin in his inaugural speech is a strategic choice. It is a matter of prioritizing the construction of CBDC first, then designing the digital Korean won ecosystem on top.

But what happens in the market during this sequence?

Korean crypto investors are already using USDT and USDC daily. Even when buying tokens on Korean exchanges with won, they convert to dollar stablecoins when trading on global exchanges or using DeFi. As long as there is no Korean won stablecoin, this flow will continue.

Once CLARITY passes, dollar stablecoins will gain legal status. Activity-based rewards will also be permitted. U.S. banks and fintech companies are launching dollar stablecoin services. In payments, remittances, and all DeFi fields, the convenience of dollar stablecoins will further increase.

Before the Korean CBDC is completed, Korean investors and businesses will be using dollar stablecoins in the digital asset ecosystem. It’s not just about convenience. It’s a structural problem: payment data accumulates in the dollar ecosystem, dependence on financial infrastructure deepens, and the digital presence of the won becomes thin.

In the monetary field, network effects are close to winner-takes-all. It is extremely difficult to change the pre-laid infrastructure later.

■ Three Questions Korea Needs to Decide

This series of reports compresses Korea’s options into three.

First is the priority of the regulatory framework. Should Korea prioritize sound regulation as demanded by BIS, or adopt the definition and clarification approach proposed by CLARITY? Both are needed, but the order determines the outcome. Regulating without definitions leaves the scope unclear. Defining without regulation allows structural risks to run unchecked. Korea has not yet completed either.

Second is Korea’s digitalization strategy for the won. During the wait for CBDC, to what extent should dollar stablecoins be allowed to expand? Should Korea pursue parallel development of a Korean stablecoin as a supplement, or wait until CBDC is complete? The later this decision is made, the deeper the foundation of the dollar ecosystem becomes.

Third is the design of exchange regulation. As domestic exchanges expand into Earn, margin, and derivatives businesses, when can a sound framework be established? Can Korea prepare before the Celsius-like structure reemerges in Korea, as BIS warns?

■ What TokenPost Sees

In writing this series, one conclusion was reached.

Korea is not delaying a choice; it has yet to realize that it must choose. Regulatory discussions exist. CBDC strategies exist. But how these are interconnected within the larger context of “global digital financial restructuring,” and what this connection means for the future of the won—this lacks comprehensive understanding.

BIS talks about control, Washington talks about definition, Seoul has not yet made a statement. The longer this silence persists, the more rules formulated elsewhere will be applied to Korea’s market. Our unmade standards will regulate our market.

President Lee Chang-yong is the architect. He understands the system logic designed at BIS better than anyone. Now, sitting at the helm of Korea’s monetary policy, he must translate this knowledge into actionable language. The sooner this translation occurs, the better.

The world of Bank 3.0 has already begun. Korea will either be a creator of this world or an acceptor— the answer is being shaped.

First article — BIS calls exchanges banks

Second article — Your Earn account is not a deposit

Third article — The U.S. chose definition over control

Fourth article — What if regulation stifles innovation

Fifth article — Korea’s choice