New to stablecoins or have questions? Browse our categorized Q&A to quickly find the answers you need.
Basic concepts and principles of stablecoins
A stablecoin is a cryptocurrency designed to minimize price volatility by pegging its value to a fiat currency (such as KRW or USD) or other assets. For example, 1 USDT is designed to always maintain a value of approximately $1. Unlike regular cryptocurrencies (Bitcoin, Ethereum, etc.), stablecoins have stable prices, making them suitable for real-world use cases like remittances, payments, and DeFi.
There are four main types: 1. Fiat-collateralized: Backed 1:1 by fiat currency like USD or KRW (e.g., USDT, USDC) 2. Crypto-collateralized: Over-collateralized by other cryptocurrencies (e.g., DAI) 3. Commodity-backed: Backed by physical assets like gold or real estate (e.g., PAXG) 4. Algorithmic: Supply controlled by algorithms to maintain price (e.g., former UST - collapsed) Fiat-collateralized stablecoins are the most stable, while algorithmic ones carry higher risks.
Key use cases for stablecoins include: - Store of value: Hold digital assets while avoiding crypto market volatility - International remittances: Faster and cheaper than banks (up to 90% fee reduction) - Payments: Used for online and offline transactions - DeFi: Access decentralized finance services like lending and staking - Exchange base currency: Used as an intermediary asset for crypto trading
Both are pegged 1:1 to the US dollar, but they differ: - USDT (Tether): Highest market cap and liquidity. However, there have been past controversies about collateral transparency. - USDC (Circle): Regulated by US authorities, publishes monthly independent audit reports. Considered more transparent. If you prioritize transparency and regulatory compliance, USDC tends to be preferred; for liquidity and broad acceptance, USDT is more common.
Yes, though rare, prices can fluctuate. This is called 'de-pegging.' Notable examples include the complete collapse of algorithmic stablecoin UST (Terra) in 2022, and USDC temporarily dropping to $0.87 during the Silicon Valley Bank (SVB) bankruptcy in 2023. Fiat-collateralized stablecoins are relatively safe, but temporary fluctuations can occur due to issuer risks and market conditions.
About Korean Won-based stablecoins
A KRW stablecoin is a digital asset pegged 1:1 to the Korean Won (KRW). It's designed so that 1 coin = 1 KRW. Currently, KRWQ (collaboration between IQ and Frax Finance) and Maroo blockchain's OKRW have been developed or launched, and domestic banks like iM Bank are also preparing to issue their own.
As of early 2026, KRW stablecoins are in their early stages. - KRWQ: Already launched and available in DeFi - Bank-issued KRW stablecoins: Expected after the Digital Asset Basic Act Phase 2 (scheduled for 2026) - iM Bank: Filed 12 related trademarks in preparation Full commercialization is expected during 2026, depending on government legislation progress.
Key benefits include: - Reduced exchange fees: Significantly lower fees compared to bank remittances - Convenient use: Intuitive pricing since the value matches KRW directly - Domestic exchange compatibility: Easy trading on Upbit, Bithumb, etc. (in the future) - Price stability: Minimal volatility risk due to 1:1 KRW peg - DeFi access: Use decentralized finance services with a KRW-based asset
Key differences: - KRWQ: Issued through IQ and Frax Finance collaboration. Over 100% collateralized with assets like BlackRock funds. Primarily used in DeFi markets. - Bank-issued (planned): To be issued by a consortium of 8 banks including iM Bank. Directly compliant with government regulations and closely integrated with traditional financial systems. KRWQ is specialized for the DeFi ecosystem, while bank-issued coins are expected to be more suitable for consumer payments and remittances.
Maroo is a Layer 1 blockchain optimized for the Korean economy and regulatory environment. Its key feature is that gas fees (transaction fees) can be paid in KRW stablecoins (OKRW), eliminating the complexity of traditional blockchains. It's also designed to comply with Korean law, allowing businesses and institutions to use it with confidence, and provides infrastructure for AI agent economics.
How to buy, store, and use stablecoins
Here's the typical process for buying stablecoins in Korea: 1. Sign up for a domestic exchange (Upbit, Bithumb, etc.) and complete KYC verification 2. Deposit KRW 3. Purchase USDT or USDC 4. Withdraw to a personal wallet if needed Once KRW stablecoins are listed on domestic exchanges, you'll be able to purchase them directly with KRW.
Safety varies by storage method: - Hardware wallets (safest): Ledger, Trezor, etc. Offline wallets with low hacking risk. - Software wallets: MetaMask, Trust Wallet, etc. Convenient but requires security awareness. - Exchange custody: Convenient but carries exchange hacking or bankruptcy risk. We recommend: hardware wallets for large amounts, software wallets for small amounts, and exchanges for active trading purposes.
Yes, it's possible. Benefits of stablecoin remittances include: - Speed: Completed within minutes (banks take 1-3 business days) - Fees: Very low (only network fees) - No time restrictions: Available 24/7/365 However, the recipient must also have a crypto wallet, and large amounts may be subject to reporting requirements depending on the country's regulations.
Key DeFi use cases: - Lending: Deposit in protocols like Aave, Compound to earn interest - Liquidity provision: Provide liquidity to DEXs like Uniswap, Curve and earn trading fees - Staking: Stake stablecoins in specific protocols to earn rewards - Borrowing: Use stablecoins as collateral to borrow other assets DeFi offers high return potential, but risks include smart contract bugs and hacking. Always test with small amounts first.
Yes, you can easily convert on domestic exchanges: 1. Deposit stablecoins to the exchange (or use existing balance) 2. Sell stablecoins for KRW 3. Withdraw KRW to your linked bank account Withdrawals typically complete within minutes to a few hours. Check exchange fees and withdrawal limits in advance.
Risk factors to know before investing
No, your principal is not guaranteed. Unlike bank deposits, stablecoins are not protected by deposit insurance. Losses can occur from issuer bankruptcy, collateral issues, or de-pegging events. However, stablecoins like USDC that comply with regulations and maintain transparent collateral are relatively safer. Always verify the issuer's credibility and collateral structure before investing.
De-pegging is when a stablecoin fails to maintain its pegged value (e.g., $1). How to prepare: - Diversify across multiple stablecoin types - Choose coins with high collateral transparency - Be cautious of coins with de-pegging history - Be aware of the higher risks with algorithmic stablecoins - Regularly monitor news and market conditions
Check the following: - Issuer information: Is the company name, location, and history clearly stated? - Collateral proof: Are independent audit reports published regularly? - Regulatory compliance: Is it registered/approved by financial authorities? - Unrealistic promises: Phrases like 'guaranteed high returns' are likely scams - Community reputation: Check reviews from trusted communities When investing in unfamiliar stablecoins, always do thorough research and start with small amounts.
Assets stored on a hacked exchange may be affected. Precautions: - Withdraw non-trading assets to personal wallets (hardware wallets recommended) - Use exchanges with insurance coverage - Check the exchange's security systems (2FA, cold wallet ratio, etc.) - Distribute assets across multiple exchanges Korean exchanges have certain protections under the Virtual Asset User Protection Act, but it's not 100% guaranteed.
Yes, check these items: 1. Collateral transparency: Are the collateral composition and ratios disclosed? 2. Independent audits: Do regular external audit reports exist? 3. Regulatory compliance: Is it approved/registered with financial authorities? 4. Issuer credibility: Track record, partnerships, financial health 5. De-pegging history: Has it experienced price deviation before? For more details, check our 'Safety Checklist' guide on this site.
Crypto taxation and regulations
Yes, taxation on virtual asset trading income is planned in Korea. A 20% tax rate (22% including local tax) on gains exceeding 2.5 million KRW annually was scheduled from January 2025, but implementation has been postponed. Since stablecoins are classified as virtual assets, trading gains and exchange profits may be taxable. Check government announcements for exact implementation dates and details.
Current Korean stablecoin regulation status: - Virtual Asset User Protection Act (enacted July 2024): Strengthened exchange obligations and user protections - Digital Asset Basic Act Phase 1: In effect - Digital Asset Basic Act Phase 2 (including stablecoin issuance regulations): Full implementation expected in 2026 due to disagreements between FSC and Bank of Korea - Corporate crypto investment: Allowed up to 5% of equity from January 2026 Legislation is ongoing, so it's important to regularly check for regulatory changes.
Using overseas exchanges isn't illegal for Koreans under current law, but there are considerations: - Overseas exchanges aren't supervised by Korean financial authorities, limiting user protection - Foreign financial account reporting: Mandatory if overseas virtual asset account balance exceeds 500 million KRW - Foreign Exchange Transaction Act: Large fund transfers may be subject to regulations Whenever possible, using domestic exchanges registered with the Financial Intelligence Unit (FIU) is safer.
Yes, stablecoins traded on domestic virtual asset exchanges are subject to the Virtual Asset User Protection Act. Key protections: - Exchange obligation to segregate customer assets - Regulation of unfair trading (market manipulation, insider trading) - Abnormal transaction monitoring systems - Mandatory insurance or mutual aid fund membership However, protection is limited when storing in personal wallets or using overseas exchanges.
How to use the KRW Stable website
KRW Stable is a comprehensive information platform about stablecoins, with a focus on Korean Won (KRW) stablecoins. Key services: - Real-time news: Latest news from Naver, Kakao, Google, and NewsData.io - Price information: Live prices of major stablecoins - Educational guides: Beginner guides, DeFi guides, safety checklists, and more - Search: Search news and information by keyword All content is available in Korean, English, and Japanese.
News is automatically collected every 30 minutes. Stablecoin-related news is crawled from 4 sources (Naver, Kakao, Google, NewsData.io), both domestic and international. Duplicate news is automatically removed. Approximately 1,200 news articles are collected daily. You can check real-time news on the home page, which also features auto-refresh functionality.
Price information is provided via the CoinGecko API and automatically refreshes every 30 seconds. However, price data is for reference only and may differ from actual trading prices. Please check your exchange directly for exact trading prices. You can verify data freshness through the 'Last Updated' time displayed on the price widget.
You can send suggestions or bug reports for KRW Stable through: - GitHub Issues: Submit on the Issues tab of the project's GitHub repository - Site footer: Contact information available in the footer section Your feedback greatly helps improve our service. We welcome all opinions, including new feature suggestions and content improvement requests.
Disclaimer
This FAQ is written for educational and informational purposes and does not constitute investment advice. All investment decisions should be made based on your own judgment and responsibility. While we strive for accuracy, information may change, so please check official announcements from relevant authorities for the latest updates.