Toss Insight Publishes Final Report on Economic Impact of  Korean Won Stablecoin, Completing Three-Part Series

• Examines how stablecoins affect monetary policy transmission, foreign exchange stability and payment infrastructure
• Evaluate risks across normal and crisis scenarios, including de-pegging, coin runs and market spillovers
• Proposes framework for “same money,” covering fungibility, reserve assets, redemption and platform design

Toss Insight, the financial research institute of Toss , announced the  publication of its third and final report in its stablecoin trilogy, titled “Economic Impact Analysis and Policy Recommendations for the Introduction of a Korean Won Stablecoin.”

This report follows its earlier publications, “Stablecoins: The Rise of a New Financial Infrastructure” and “In the Era of Dollar Stablecoins, the Choice for the Korean Won: Global Trends and Domestic Implementation Strategies.” It provides a comprehensive analysis of the potential benefits and costs of institutionalizing a Korean won stablecoin from the perspectives of macroeconomics, international finance, and payment systems.

The report defines stablecoins not merely as digital payment instruments, but as a financial framework directly connected to monetary policy transmission channels, foreign exchange and capital flows, and payment infrastructure. Rather than focusing on technological superiority or the success of specific business models, the study applies an economic analytical perspective to examine how stablecoins generate costs and benefits across the economy.

Chapter 1 analyzes how the monetary policy transmission to the real economy may evolve if stablecoins become widely used as a medium of exchange, using a small open economy model. In particular, it highlights mechanisms through which monetary policy could operate in unintended ways when dollar-denominated stablecoins circulate alongside domestic currency, raising concerns about reduced monetary sovereignty and policy autonomy. Toss Insight notes that as stablecoin adoption grows, disruptions to monetary policy transmission may become increasingly difficult to avoid, underscoring the need for proactive monitoring and institutional preparedness.

Chapter 2 examines the impact of introducing a won-based stablecoin on foreign exchange market stability and capital flow dynamics, under both normal and stress scenarios. Under normal conditions, a 1:1 peg structure may have limited impact on exchange rates. However, in stress scenarios, events such as de-pegging and large-scale redemption demands, or coin runs, could amplify exchange rate volatility and financial instability. The report also notes that a won-based stablecoin could reduce domestic and international price discrepancies in crypto markets, known as the “Kimchi premium,” by enabling real-time arbitrage. At the same time, it may introduce new risks, including the expansion of a digital shadow foreign exchange market and potential circumvention of capital controls. To mitigate these risks, the report proposes enhanced reporting thresholds, extending the Travel Rule to personal wallets, and applying anti-money laundering obligations on stablecoin issuers.

Chapter 3 explores the conditions under which stablecoins can function as “ same money” as existing forms of currency, from the perspective of singleness of money within payment systems. It emphasizes the importance of par convertibility with fiat currency, robust reserve asset management and redemption mechanisms, and improvements in issuance and circulation structures. The report further proposes development of a unified platform enabling seamless exchange between stablecoins and deposit money, with final settlement in central bank money, as a way to minimize fragmentation in the monetary system.

Through this report, Toss Insight underscores that discussions on introducing a Korean won stablecoin should move beyond a binary “allow versus prohibit” debate toward questions of design and regulation. By offering analytical insights and policy recommendations for policymakers, financial institutions, and researchers, the report aims to lay the groundwork for a resilient digital financial infrastructure.

“Discussions on stablecoins should move beyond industrial perspectives or evaluations of technological efficiency, and be reframed in terms of macroeconomic balance and monetary system stability,” said Ki-hoon Hong, Head of  Research at Toss Insight.“This study examines how a Korean won stablecoin generates costs and benefits through various economic channels, from both theoretical and institutional perspectives.” Hong also added that he hopes the report will serve as a reference for more evidence-based policymaking and institutional design regarding Korean won stablecoins.