Korean Won Stablecoin Could Save Merchants $3.8 Billion in Fees Annually
According to the National Assembly Budget Office of South Korea, if the Korean won stablecoin is widely adopted, merchants in South Korea could save up to $3.8 billion annually in payment processing fees.
The core logic behind this estimate is that currently, South Korean merchants incur transaction fees when processing credit card and third-party payment transactions, which are paid to issuing institutions, acquiring institutions, and payment networks. The blockchain-based Korean won stablecoin settlement could bypass these multi-layered intermediaries, allowing for more direct fund clearing between merchants and consumers.
The potential annual savings of $3.8 billion is based on the overall merchant fee expenditure under the current credit card and electronic payment penetration rates in South Korea. This implies that if the Korean won stablecoin can significantly replace existing payment settlement channels, the cost savings will benefit a wide range of merchants, particularly in retail and dining that heavily rely on card payments.
This estimate comes from the National Assembly Budget Office, which typically provides policy impact assessments for legislative and budget reviews. Its findings are considered to have a certain level of official reference value and reflect that South Korea's policymakers are seriously evaluating the potential impact and benefits of domestic stablecoins on the existing payment industry chain.
For the Korean won stablecoin to achieve these savings, it is essential to establish a payment infrastructure and settlement network that covers a sufficient number of merchants and consumers, including wallets, acquiring terminals, and integration with existing banking settlement systems. This means that the savings effect is more of a theoretical upper limit in the short term rather than actual realized data.
From the perspective of the industry chain's interest structure, if the Korean won stablecoin is widely implemented, the most directly pressured will be the existing credit card issuing institutions, acquiring institutions, and payment networks, as their fee income sources will be diverted to the stablecoin settlement system. The beneficiaries will be numerous small and medium-sized merchants (directly saving costs) and institutions that may dominate the issuance and settlement infrastructure of the Korean won stablecoin in the future, including banking consortiums or licensed tech companies.
Source: Public Information
ABAB AI Insight
In recent years, South Korea has significantly accelerated its legislative efforts regarding stablecoins—previously, South Korean financial regulators have repeatedly signaled that they would allow banks to issue domestic stablecoins, and several major South Korean banks have been reported to be jointly exploring the possibility of issuing a Korean won stablecoin. This aligns with the global trend of many countries accelerating their domestic stablecoin legislation following the passage of the U.S. "GENIUS Act."
The $3.8 billion potential savings estimated by the National Assembly Budget Office essentially points to the reallocation of payment fees from the existing credit card industry chain to the stablecoin settlement system. Once stablecoin settlements are scaled, the fees that originally flowed to international card organizations and local issuing and acquiring institutions will partially transform into cost savings for merchants, while also creating new revenue sources for stablecoin issuers and settlement infrastructure providers.
This is similar to the logic behind Brazil's Pix real-time payment system, which significantly reduced merchant credit card processing costs after its launch. Pix was led by the Brazilian central bank and quickly replaced a large number of traditional card transactions, significantly lowering payment costs for merchants. South Korea is currently at a critical stage in stablecoin legislation, shifting from "regulatory observation" to "actively calculating benefits and promoting legislation."
This essentially represents a transfer of pricing power—within the traditional payment industry chain, international card organizations and issuing institutions have long charged merchants high transaction fees due to their monopolistic position in the clearing network. In contrast, domestic stablecoin settlements bypass this monopolistic clearing network, transferring payment pricing power from international card organizations and issuing institutions to stablecoin issuers, blockchain settlement networks, and even the merchants themselves. The core mechanism is that the direct settlement capability at the technical level weakens the long-standing information and network monopolistic advantages of traditional payment intermediaries.
ABAB News · Cognitive Law
- Whoever controls the clearing network controls the pricing power of fees.
- Every cent saved by stablecoins is taken from the old payment system.
- Once the government starts calculating, the old financial infrastructure should be on alert.