South Korea needs payment services that can compete with dollar-backed alternatives in terms of cost and speed, Dunamu’s Oh Kyoung-suk says. Dunamu, which operates South Korea’s largest cryptocurrency exchange, Upbit, is preparing to provide technology and distribution support once the necessary legal and regulatory framework is in place. He argued that Korea needs payment services that can compete with dollar-backed alternatives in terms of cost and speed. “We need to protect the won and expand its use,” he said in an interview at Korea Blockchain Week on Thursday.
Dunamu said separately that it hasn’t set a firm timeline for its stablecoin plans, noting that legislation could take time to come into effect even if passed this year. South Korea is developing laws to govern who can issue won-backed stablecoins and how they would operate. Stablecoins are digital tokens designed to maintain a steady value against a currency or another asset.
Dunamu’s push toward stablecoins comes as it seeks to build a broader financial business and expand internationally through partnerships. Naver Financial—which operates one of South Korea’s largest mobile payment platform, Naver Pay—agreed in November last year to acquire Dunamu through a share swap that would make it a wholly owned subsidiary. The exchange is scheduled for Dec. 31, after being delayed from September.
Dunamu confirmed that the schedule and transaction structure remain unchanged. “We have announced that target and are working toward it,” Oh said. Hana Financial Group separately announced in May that it would buy a 6.55% stake in Dunamu from Kakao Investment for about 1 trillion won, equivalent to roughly $670 million at the time. Oh said the investment was intended to strengthen their partnership.
Hana Bank and Dunamu have tested an overseas remittance service, but regulatory and operational issues remain unresolved. Dunamu said further testing and review would precede a decision on a commercial launch, without providing a timeline. “We have done the testing, and I think more time will be needed before it can actually be used,” he said. Oh distinguished Dunamu’s planned role in stablecoins from issuing them itself: “Digital-asset exchanges distribute them; they are not the issuers,” he said.
Korea’s active individual investors provide a base for the expansion of their distribution on Upbit, he said. Dunamu said access for corporate customers would expand in stages as regulations permit, with the company building custody capabilities, infrastructure and internal controls to support broader participation. “The biggest competitive advantage, from where we stand now, is strong retail liquidity,” Oh said. Dunamu is looking at Japan, the U.S. and Europe alongside Southeast Asia as markets of interest, though Oh said no new market entry or local presence in those markets has been confirmed.
Upbit-branded operators in Singapore, Indonesia and Thailand have technology and licensing agreements with Dunamu, which holds no equity stakes in them, the company said. Stronger technology and greater investment capacity were necessary to compete globally, Oh said. “Without that, Korean finance and Korean markets will inevitably lose a lot to large overseas platform companies,” he said. Write to Jihye Lee at [email protected].
Source: Wall Street Journal Markets · Summarized by HeadlinesBriefing