Analyst: The introduction of a Korean won stablecoin will benefit the securities industry and is expected to have a negative impact on the banking sector

According to ChainCatcher, citing a report from Newsis, as discussions around the introduction of a Korean won stablecoin intensify in South Korea, analysts believe that direct issuance of stablecoins by banks could lead to a decline in their interest income. A report released by NICE Investors Service indicates that the adoption of stablecoins in the financial industry is expected to have a negative impact on the banking sector, while having a positive effect on the securities industry.

If capital flows into stablecoins, banks’ deposit bases may shrink, weakening their intermediary function. Although banks can partially offset the decline in profitability through income generated from stablecoin reserve operations, these returns are still lower than those from loan interest. Currently, about ten banks have established consulting bodies to jointly address the challenges posed by stablecoins and are considering forming a joint venture to issue a common stablecoin.

Analysts point out that the introduction of stablecoins is expected to have a positive impact on the securities industry in the medium to long term, while the impact on the credit card industry will be relatively minor. For the practical application of stablecoins to advance, legal, technical, and economic incentive conditions must be met.