Korea Stablecoin Debate Shifts to Settlement Infrastructure, Not Issuance

As stablecoins move from a niche trading tool toward mainstream financial plumbing, the next battleground may not be issuance or consumer payments—but the ‘settlement infrastructure’ that allows businesses to actually use them at scale, according to Oh Jong-wook, CEO of South Korea-based Wavebridge.

In an interview conducted on Sunday ET (May 17), Oh argued that Korea’s stablecoin debate is overly concentrated on who will issue a won-pegged token and how it might plug into card networks. The harder—and more immediate—problem, he said, sits between issuance and payment: when a Korean exporter is paid in dollar or other foreign-currency stablecoins, where that asset is legally held, how it is converted, and through which regulated channel it is settled back into corporate treasury operations.

“Even if stablecoins are issued, they don’t matter if settlement can’t happen,” Oh said, framing the issue as a structural gap that neither exchanges, custodians, nor payment gateways can fully solve on their own.

A prime brokerage pitch for the ‘missing layer’

Wavebridge positions itself as a ‘digital asset prime broker’—a term borrowed from traditional finance, where prime brokers bundle execution, financing, custody, and operational services for hedge funds and institutional clients. Oh, a former fund manager who began his career at Mirae Asset Management in 2006, said institutions prefer consolidated workflows rather than fragmented stacks where execution, custody, conversion, and reporting sit in different places.

That bundled model is common in the U.S. and Europe, where firms such as FalconX, B2C2, and Coinbase Prime have become key intermediaries for professional crypto flows. Oh noted that during the early phase of U.S. spot Bitcoin (BTC) ETF launches, prime brokers were widely reported to handle a substantial share of initial liquidity as issuers and authorized participants sought institutional-grade market access and operational support.

Korea, by contrast, remains heavily retail-oriented, Oh said. Major exchanges such as Upbit and Bithumb are primarily designed for individual investors, while custodians focus on safekeeping rather than end-to-end settlement and FX functionality. The result is a gap for asset managers, insurers, and corporates that need a compliant ‘one-stop’ route for trading, custody, transfers, and conversion.

Regulatory licensing and platform buildout

Wavebridge’s institutional push has accelerated over the past year. The company said its Virtual Asset Service Provider (VASP) registration was accepted in December 2024, positioning it under Korea’s regulated crypto framework without operating as an exchange. It also rebranded and rebuilt its institutional platform—formerly known as Dolfin—into ‘Wavebridge Prime,’ integrating exchange connectivity, custody, wallets, and on-chain verification modules to support consolidated purchasing, holding, and trading workflows.

On April 27, Wavebridge launched a multi-currency stablecoin custody service covering 11 stablecoins across six currency areas. The supported assets include five U.S. dollar tokens—Tether (USDT), USD Coin (USDC), Global Dollar (USDG), PayPal USD (PYUSD), and Ripple USD (RLUSD)—as well as Euro Coin (EURC), JPYC (JPY), XSGD (SGD), BRLA and BRZ (BRL), and AUDD (AUD). The company said it plans to add Mexican peso (MXN) and Hong Kong dollar (HKD) stablecoins.

Oh linked the multi-currency approach directly to trade settlement. Korean exporters sell into multiple markets, he said, and could increasingly be paid in stablecoins denominated in the buyer’s local currency rather than routing everything through bank wires and the SWIFT network. In that scenario, the operational challenge becomes institutional custody, reporting, conversion, and settlement—not merely accepting a token payment.

Why settlement is harder than payments in Korea

Oh emphasized that Korea’s current operating environment still constrains stablecoin usage in mainstream commerce. Payment gateway (PG) and VAN providers generally cannot handle virtual assets directly, and many crypto businesses lack the banking relationships—such as real-name won settlement accounts—needed to bridge between crypto rails and fiat settlement in a compliant manner. Meanwhile, Korea’s large exchanges do not typically provide tailored institutional settlement services for corporate cross-border use cases.

That leaves a practical bottleneck: a Korean company may be able to receive stablecoins from overseas counterparties, but lacks a straightforward, regulated way to manage corporate-grade custody, FX conversion, and final settlement. Oh said this is the niche where a prime brokerage model can become the connective tissue between the token world and traditional finance.

Foreign exchange law revision reshapes the market

A key inflection point, Oh argued, is Korea’s revised Foreign Exchange Transactions Act, which passed the National Assembly on Wednesday ET (May 6). The amendment defines overseas transfers of virtual assets as a newly categorized business activity and requires domestic VASPs to build reporting systems and disclose overseas transfer details to the Ministry of Economy and Finance and the Bank of Korea within six months.

In practice, this extends a reporting architecture long applied to foreign-currency remittances into the digital asset realm. Oh said the change matters not only for oversight but also because it formally delineates a regulated space where crypto-native firms—not card networks or commercial banks—can legally operate settlement and cross-border transfer functions.

“It creates a market explicitly—one that banks and card companies can’t touch directly,” he said, likening VASPs’ reporting obligations to those borne by foreign exchange banks when customers remit fiat abroad.

From custody to a ‘stablecoin bank’ blueprint

Wavebridge’s longer-term ambition extends beyond custody. Oh described a roadmap toward a ‘stablecoin bank’ model that stacks FX, payments, and fund transfer capabilities on top of stablecoin custody infrastructure—placing crypto-native settlement tools in a role similar to a bank dealing room that manages multi-currency liquidity, but with tokenized cash equivalents.

He pointed to global dealmaking as evidence that stablecoin settlement is becoming a strategic priority. Stripe’s acquisition of Bridge and Mastercard’s move into stablecoin infrastructure through BVNK were cited as examples of payment giants treating stablecoin settlement as a core capability rather than an add-on.

“The direction of major global players is converging,” Oh said, arguing that Korea’s market has room for domestic infrastructure providers as regulatory clarity improves.

Why stablecoin issuers are looking for Korean partners

Oh also said major stablecoin issuers including Circle and Paxos are increasingly interested in partnerships with Korean firms, not necessarily because Korea is easy to enter—but because it is hard. Establishing a fully licensed local operation can be burdensome for foreign companies, he said, making collaboration with domestic regulated entities a more realistic path.

Wavebridge said it maintains close working relationships with multiple stablecoin issuers and is preparing partnership models that can combine infrastructure services with compliance capabilities such as ‘KYC’ (know-your-customer) processes.

The company is currently running six proof-of-concept projects with domestic financial institutions and card companies, including crypto payment infrastructure for card networks, prime brokerage support for ETF-related flows, and in-person payment services for foreign visitors.

The institutional stack Korea still lacks: ‘wallets’ and standards

When asked what Korea most needs to onboard institutions, Oh’s answer was not a new exchange or another token—it was ‘wallet’ infrastructure. He described institutional wallets as a hybrid of a brokerage account and a bank account, enabling governance, permissions, security controls, and transaction policy enforcement suitable for large organizations.

Globally, institutional wallet and custody providers such as Fireblocks, BitGo, and Zodia have become core components of the professional crypto stack. In Korea, Oh said, that layer remains underdeveloped. He also highlighted a lack of standardized institutional compliance frameworks—covering travel rule and surveillance-related controls such as ‘KYT’ (know-your-transaction)—as well as unresolved accounting and tax guidance for corporate and institutional digital asset operations.

Institutions move quietly despite the downcycle

While crypto prices have remained under pressure since around October last year, Oh argued that institutional interest in Korea has continued to build, albeit quietly. He cited moves such as Mirae Asset’s acquisition of crypto exchange Korbit and Hana Financial Group’s stake purchase in Dunamu, the operator of Upbit, alongside ongoing market discussions around further strategic investments in the sector.

In Oh’s view, down markets can lower reputational and timing barriers for cautious financial institutions, giving them space to build capabilities before the next expansion phase. He also suggested that Korea’s slower pace on certain policy decisions—such as requirements for stablecoin issuance or exchange governance—may indirectly provide traditional players time to prepare.

A pivot year for Korea’s stablecoin and settlement market

Oh believes the late-2026 to 2027 period could become a turning point as Korea aligns regulatory architecture for digital assets and cross-border settlement. He pointed to accelerating global momentum in stablecoin legislation and large-scale industry consolidation, arguing that Korea will eventually be pulled into the same direction as tokenized settlement becomes a competitive necessity for payments and trade.

Ultimately, the stablecoin race in Korea may hinge less on who issues the next token and more on who can build the compliant rails to custody, convert, report, and settle multi-currency stablecoin flows for corporates and institutions. If that infrastructure emerges, Oh argues, stablecoins could evolve from a trading instrument into a foundational layer for next-generation financial services.