Stablecoins and CBDCs in Korea and Asia: regulation, adoption, and trends

John Park, Head of Korea at the Arbitrum Foundation, provides an overview of the current crypto, CBDCs, and stablecoins landscape in Korea and Asia, including use cases and how traditional financial players will adapt to this evolving landscape.

For readers who might not be familiar, what is Arbitrum in a nutshell?

Arbitrum is the infrastructure layer that makes on-chain systems practical for real businesses. The task is straightforward to state and difficult to deliver enterprise-grade security, predictable costs, and confirmation in seconds at a consumer scale.

At a high level, Arbitrum processes large batches of transactions and verifies them as a single unit. That design cuts costs materially and delivers confirmation in seconds, so the technology fades into the background and the product experience stands out.

Our flagship network, Arbitrum One, handles the majority of activity - from DeFi protocols to enterprise applications. But one size does not fit every business. A broker, a game studio, and a bank will make different choices about throughput, privacy, and fee economics. Arbitrum Orbit addresses these challenges. Any organisation can deploy its own chain, tuned to its needs, while staying connected to the broader Arbitrum ecosystem for liquidity and distribution.

This creates a clear path. Start on Arbitrum One to validate a live product with real users. When the model is proven, graduate to a dedicated Orbit chain to control costs, throughput, and governance without losing proximity to the broader network. That is why firms as different as consumer platforms, loyalty networks, and financial brands are standardising on Arbitrum: build once, deploy anywhere, scale when ready.

How would you describe the current state of the digital assets landscape in Korea and Asia more broadly, particularly regarding crypto adoption, CBDCs, and stablecoins?

Korea combines deep retail participation with fast-maturing guardrails. Roughly 32% of the population - over 16 million people - holds crypto, a figure that exceeds the 14.1 million domestic stock investors. Policymakers have read that signal and moved from containment to structured participation: strengthening consumer protection, keeping activity onshore, and opening institutional pathways.

Stablecoins sit at the centre of this shift. Korean officials looked at trading data showing massive quarterly volumes in USD-backed stablecoins and recognised a monetary sovereignty issue: when citizens store value in digital dollars instead of digital won, it weakens the government's monetary policy tools. The response now in motion is to licence won-pegged stablecoins with high-quality reserves, frequent attestation, and clear redemption rights, so domestic payments can run on modern rails without ceding currency preference.

Across Asia, the pattern is similar with local nuance: central banks advance CBDC pilots to upgrade wholesale settlement and protect monetary control, while regulated fiat-referenced stablecoins transform cross-border commerce and remittance flows throughout supply chains that span multiple jurisdictions.

Can you walk us through the regulatory environment in Korea?

Korea has sequenced reform in a way that builds public trust first and then widens institutional access. The Virtual Asset User Protection Act, fully implemented in July 2024, set clear operational baselines for exchanges: a minimum of 80% of customer assets in cold storage, meaningful insurance coverage, 15-year record retention, and quarterly financial audits.

With that groundwork in place, policy is moving to phase two - responsible access and innovation. The government has reversed the seven-year prohibition on VC investment into crypto companies, and preparatory work on Bitcoin ETFs is progressing to give citizens regulated exposure. Supervisors are also raising the quality bar within the market through exchanging self-regulatory standards on listings and market conduct, which reduces the probability of retail harm while keeping liquidity onshore.

The focus now is stablecoins. Lawmakers are shaping a licencing framework that treats issuers as financial institutions with prudential obligations, reserve quality rules, and reporting standards, with a particular emphasis on won-pegged instruments that can be used safely in domestic commerce. The Digital Asset Basic Act is expected to codify these requirements and clarify remits across agencies. In short, the policy direction is plain: protect users, formalise issuance, and then invite institutional capital to operate on transparent rails.

One of Arbitrum’s key promises is scalability. How is Arbitrum helping to make payments and transactions more efficient – both in Korea and globally?

Questioning the scalability is really about business model enablement rather than just technical performance. Traditional payment systems work adequately for most use cases until you need programmable money, 24/7 settlement, or cross-border interoperability without correspondent banking relationships.

In Korea, MiL.k provides a practical case. The company runs loyalty programmes for 1.5 million users across partners, including Lotte and AirAsia. MiL.k moved to Arbitrum to coordinate real-time point exchanges across multiple corporates without subjecting end users to network friction. Within five weeks of migration, more than 80.000 user wallets became active on Arbitrum. To customers, the blockchain disappeared. They received faster, cleaner service while the infrastructure did the heavy work.

The bigger efficiency shock shows up in cross-border B2B flows. Transactions that took days and three FX hops with all-in costs of 5–12% are now settling in minutes with expenses under 1% when stablecoins are used for the payment leg. Arbitrum secures over USD 20 billion in total value today, including more than USD 9 billion in stablecoins. Those balances are not idle. They function as working capital for operational payments, trade finance, and treasury moves.

From a builder’s perspective, the path is straightforward: build once, deploy anywhere. Teams can choose public settlement for reach, Orbit chains for dedicated throughput, and data-availability options that fit their compliance posture. The end state is the same in every case - predictable fees, low-latency confirmation, and a user experience where the chain is invisible and the service is what stands out.

Stablecoins are often highlighted as a bridge between TradFi and DeFi. From your perspective, which use cases for stablecoins are most promising in Asia right now, and what problems in the payments space could they realistically solve?

The strongest use cases address old, well-known challenges. Cross-border B2B payments are first in line. Asian supply chains involve multi-currency, multi-jurisdiction settlements with layers of correspondent banking that create delay, fee drag, and reconciliation complexity. A Korean semiconductor supplier buying inputs from Taiwan and selling into Germany may face four banks, three currency conversions, and settlement uncertainty that ties up working capital. Replace that with stablecoin settlement, and the firm gets predictable same-day finality, transparent fees, and clean reconciliation data.

Stablecoins also turn cash-flow management into real-time capital allocation. Treasurers can move value between regional hubs on weekends, pre-position funds for supplier payments, and net exposures in near real time. That improves days-sales-outstanding and reduces the working-capital gap. Invoices can settle against a programmable escrow that releases funds automatically when delivery data hits the chain. For finance teams, the benefit is not ideology - it is closing the books faster with fewer exceptions.

Looking ahead, what role do you see traditional financial institutions playing in a future shaped by stablecoins and digital assets?

Traditional institutions are positioning themselves as the regulated infrastructure that brings digital assets to the mainstream. We see this directly on Arbitrum. BlackRock’s BUIDL initiative brought institutional-grade tokenized treasuries into live use on-chain. Franklin Templeton’s BENJI money market fund has issued tokenized assets that operate on Arbitrum rails. Robinhood selected Arbitrum for European tokenized stock trading and is building a custom Arbitrum chain to align throughput, fee economics, and user experience with its product goals.

These are established financial giants using blockchain infrastructure to optimise their existing business models. On-chain settlement reduces operational overhead, fractionalises access, and expands market hours without compromising controls. The regulatory perimeter remains intact while the operational plumbing improves.

Korean banks provide another example of this strategic positioning. KB Kookmin Bank has filed 32 trademark applications for won-backed stablecoins while establishing dedicated digital asset response councils. Shinhan Bank created a 20-person crypto task force. Woori Bank formed stablecoin development consortiums. These are offensive strategies to capture new revenue streams while leveraging existing competitive advantages in trust, regulatory compliance, and customer relationships.

Finally, if you had to highlight one major opportunity and one major challenge for the Web 3 space in Korea/Asia in the next 3–5 years, what would they be?

The opportunity: Korea can set the global template for how culture, capital, and technology reinforce each other in Web 3. Regulatory clarity is arriving, the economy is export-oriented, and the user base is highly digital. Adoption is already spread in the retail market, and policy is now tuned for institution-grade participation. That combination is rare. If Korean firms prove a repeatable Web 3 business model domestically, they will export it through global entertainment, gaming, and commerce networks where Korea already leads. Standards spread most quickly when they ride successful products.

The challenge: delivery discipline at the policy and corporate level. The framework is strong, but outcomes depend on execution. Inter-agency clarity on stablecoin oversight should be resolved cleanly so issuers and payment firms know precisely who they answer to and what the rules require. Corporate access pilots should demonstrate measurable business value - shorter settlement cycles, lower error rates, better cash-flow metrics - not just regulatory compliance. Consumer protection rules must remain a shield, not a speed limit. If reviews become too process-heavy, activity will move offshore, and the policy goals will be undermined.

About author

John Park leads institutional partnerships for Arbitrum across Asia, focusing on blockchain infrastructure and digital assets. Previously, he was CEO of Al Ahli Holding Group's innovation division and a partner at SparkLabs, whose portfolio includes OpenAI, Anthropic, and Messari. He specialises in integrating decentralised technologies into global financial systems.