Stablecoins Could Save South Korean Merchants Up to $3.8 Billion Annually, Budget Office Warns of Risks

South Korea’s budget office has highlighted both the economic upside and the systemic risks of adopting stablecoins in the country’s retail payments ecosystem.

Potential Savings for Merchants

The office estimates that stablecoin‑based transactions could reduce costs for South Korean merchants by as much as $3.8 billion per year, primarily by lowering transaction fees and streamlining settlement processes.

Risks to Traditional Banking Functions

At the same time, officials warned that a shift toward stablecoins could diminish banks’ roles as credit intermediaries, potentially limiting their ability to provide loans and other financing services.

Stability Concerns for Token Pegs

The budget office also cautioned that large‑scale redemptions of stablecoins could destabilise the peg that keeps these tokens tied to fiat currencies, creating market volatility.

Policy Implications

Policymakers will need to balance the cost‑saving benefits for merchants with the need to preserve financial stability and the traditional banking sector’s credit functions.