A stablecoin is a type of digital currency with a stable value, typically pegged 1:1 to a stable asset such as the USD or gold. For example, one stablecoin pegged to USD always holds the value of one dollar. Since its price does not fluctuate like other cryptocurrencies, it is not viewed as an investment asset. However, stablecoins serves well as a store of value and settlement asset in crypto markets. When someone earns profits through cryptocurrencies like Bitcoin, they can convert those earnings into stablecoins instead of cashing out and depositing them in a bank. This allows them to preserve their value without volatility and use the funds whenever needed.

  Furthermore, since stablecoins are borderless digital currencies, they can be used freely anywhere in the world. For instance, when a Korean consumer wants to buy goods from a U.S. online store, they would normally need to exchange KRW for USD and pay exchange fees. With stablecoins, payments can be made directly without currency exchange, eliminating fees and removing concerns about price fluctuations caused by changes in exchange rates. However, as stablecoins are not issued by banks or governments, some may impugn whether they can truly function as money. To address this, issuers hold reserves. A reserve means that for every coin issued, the issuer holds an equivalent amount of secure assets. For example, to issue one stablecoin worth one dollar, the issuer must keep one dollar in reserve and regularly publish audit reports verifying that the reserves are sufficient.

  The revenue structure of stablecoin issuers is simpler than it may seem. Issuers invest the funds deposited by users into government bonds and similar assets, earning interest in return. This interest income from bonds serves as their primary source of profit. In addition, some issuers charge fees when issuing or redeeming coins. For instance, the most prominent stablecoin, Tether imposes fees for large-scale coin issuance. While individual users usually buy and sell coins through exchanges without paying these fees directly, the exchanges themselves cover the associated costs.

  According to the World Bank, hundreds of millions of people around the world remain unbanked and unable to access financial services due to issues such as lack of identification or geographic limitations. However, thanks to stablecoins, anyone with a smartphone and internet access can now make payments, transfer money, and save funds without needing a bank account. For example, a farmer in a rural area of Africa can use stablecoins to participate directly in international trade or sell products online and receive payments digitally.

  Experts cited by The Korea Economic Daily have noted that this development significantly improves financial accessibility and expands opportunities for global economic participation. Stablecoins are thus emerging not merely as digital currencies but as powerful tools for advancing financial inclusion.

  Stablecoins are digital currencies with stable values, but they can also affect the authority to control a nation’s money known as monetary sovereignty. Monetary sovereignty refers to a central bank’s ability to stabilize prices and manage the economy through interest rate adjustments and currency issuance. A central bank regulates the economy by purchasing government bonds to inject money into circulation or by selling them to withdraw money from the market. When there is too much cash in circulation, it raises interest rates to encourage people to deposit their money in banks, thereby controlling the amount and value of money in the economy.

  However, in countries where inflation is high and the value of the national currency is unstable, more people are turning to stablecoins, which maintain stable value. According to Hans Biz, when the economies of Venezuela and Argentina deteriorated and inflation worsened, citizens began using stablecoins instead of their national currencies. This phenomenon makes it difficult for central banks to implement monetary policies based on their own currencies, potentially weakening their monetary sovereignty. If monetary sovereignty is weakened, central banks lose control over inflation. If people use USD-based stablecoins instead of the national currency, changes in U.S. monetary policy could have a direct impact on domestic prices.

  Stablecoins are growing rapidly. In mid-2024, there were only about 60 types, but by the end of May 2025, the number had nearly tripled to around 170. Their total market capitalization has expanded to approximately 255 billion USD (about 3,500 trillion KRW). Among them, Tether holds over 70% of the global market share, demonstrating its overwhelming influence. Such a rapid expansion of stablecoins is indeed a noteworthy phenomenon.