The top executives of Circle, the issuer of the stablecoin USDC, will meet with domestic financial, political, media, and industry representatives, including Hana Bank, to explore collaboration opportunities in the Korean market. This visit is interpreted as a 'localization strategy' for Circle's business cooperation, beyond mere promotion, including the expansion of USDC distribution.
According to the virtual asset industry on the 16th, His Tabert, the CEO of Circle, who will visit South Korea next week, is expected to have comprehensive meetings with representatives from domestic financial holding companies, the fintech sector, and the government. Circle has already signed a comprehensive memorandum of understanding (MOU) with Hana Bank in May in a non-face-to-face format, and discussions on specific collaboration plans are known to be ongoing.
◇ Expanding USDC presence in Korea, a major player in virtual assets
This visit appears to go beyond simple promotion and relationship-building, aiming to confirm the domestic regulatory environment and lay the foundation for the spread of USDC and Circle Payment Network (CPN). Circle is broadening its international market through localization strategies tailored to each country's regulations. Previously, Circle issued a euro-pegged stablecoin (EURC) in line with the European Union's (EU) virtual asset regulations, MiCA, and made a strategic investment in JPYC in Japan.
Underlying this is Circle's limitation in that it needs to increase the circulation of USDC while being pointed out for revenue diversification. Circle's revenue structure is straightforward. The interest revenue obtained from holding the issued USDC in U.S. dollars or U.S. government bonds at a 1:1 ratio accounts for the majority of its total revenue, and the interest income generated from these reserve assets is directly linked to interest rates and USDC circulation.
Therefore, when interest rates fall, profits drop sharply, and conversely, when circulation increases, revenue grows. As the circulation of USDC needs to increase to boost the basic interest revenue (the foundation of the revenue structure), securing issuance and distribution channels in regulatory-friendly countries is essential. Korea's virtual asset market is one of the largest in the world, and since domestic banks have channels to utilize USDC for overseas remittances and trade settlements, Circle sees opportunities for stable distribution expansion through institutional financial networks.
Connecting with financial, governmental, and industrial sectors during this visit can also be viewed as an effort to establish USDC as a legitimate and credible infrastructure, thereby lowering regulatory and psychological barriers to expanding its circulation. This strategy is also a crucial task for competing with Tether (USDT), which holds approximately 62% of the global stablecoin market, to raise the current market share of USDC, which is around 30%.
◇ Circle's goal is an international payment network… cooperation with Korean corporations is critical
For Circle's alternative to the international payment network SWIFT, cooperation with Korean corporations is necessary. In May, Circle launched the 'CPN (Circle Payments Network)' based on USDC, positioning it as an alternative to the existing SWIFT network. CPN aims for real-time settlement 24/7, cost reduction, and enhanced transparency, presenting strengths distinct from the traditional SWIFT method.
The remittance process of CPN involves the remitting country's financial institution (OFI) converting the remittance amount into a stablecoin like USDC and transferring it to the receiving country's financial institution (BFI), which then delivers it either as a stablecoin or exchanges it for local currency. This process significantly shortens cross-border payments and settlements, which traditionally took 2 to 5 business days through the existing SWIFT network, to nearly real-time.
In particular, because it bypasses intermediary banks and SWIFT, it effectively circumvents the existing global payment network. Being excluded from SWIFT, established in 1973, would have meant expulsion from the global trade and finance network; however, if CPN expands, it is assessed to have the potential to shake the very financial order. Already, 28 companies, including major global banks like Standard Chartered, Deutsche Bank, Société Générale, Santander, and remittance firms like Pomopay in Singapore, BVNK in the UK, and Nilos in Israel, are participating as partners.
Kim Min-seung, head of the research center at Kobit, noted, "For foreign virtual asset companies, Korea's crypto market is a place like 'El Dorado,' drawing significant interest. Much has been blocked by regulations in a country where the new government is establishing infrastructure, and there is also the issue of the won stablecoin, so the industry sees this visit as intriguing."