[Part 1] Hegemony of Stablecoins: Global Stablecoin Dominance and US Regulatory Reforms
[Part 2] Hegemony of Stablecoins: KRW Stablecoins at the Crossroads of Innovation and Regulation
[Part 3] Hegemony of Stablecoins: Ethereum’s 'Meta Transactions' as the Key to Cost Innovation
[Part 4] Hegemony of Stablecoins: The Future of Finance Lies in Cars and AI
[Part 5] Hegemony of Stablecoins: Why is South Korea Considering Issuing Won-Based Stablecoins?
USDT and Capital Outflow: Stablecoins Hiding in the Regulatory Gaps
The rapid growth of stablecoins, particularly USDT (Tether), has become one of the most prominent topics in the cryptocurrency sphere. A recent report revealed that the total amount of stablecoin transactions processed by online gambling platforms alone reached a staggering $217.8 billion in 2024. This figure underscores the emergence of a “shadow system” in the global financial market—a powerful frontier where regulation’s weaknesses are exploited in the ongoing battle between innovative ‘swords and shields’.
Reflecting on the case of SatoshiDice, which in 2012 represented one of the earliest experiments of blockchain technology’s potential, we see that it accounted for over half of Bitcoin network transactions at its peak. Back then, the platform promoted ‘provably fair’ gambling, under the slogan “Don’t Trust, Verify,” which helped expand the market by emphasizing verifiable transparency. However, despite these technical innovations, it faced hindrance and eventual disappearance within the framework of U.S. regulations.
The U.S. responded to online gambling through the 2006 Unlawful Internet Gambling Enforcement Act (UIGEA), which didn’t criminalize online gambling directly but imposed strict restrictions on money flows. Essentially, it erected a ‘wall’ to block the movement of funds. Yet, digital dollars—particularly stablecoins—found a way around this barrier. With their many layers of anonymity and integration into global networks, USDT managed to bypass these regulatory ‘gateways’.
Currently, international regulators are countering this trend by strengthening on-chain analytics—such as those performed by companies like Chainalysis—to identify suspicious sources of funds. They are also applying measures like the “Travel Rule,” prompting exchanges to improve their monitoring systems. These efforts include tracking and blacklisting addresses associated with illicit activities. However, despite these measures, the reality remains that complete control over capital outflow driven by stablecoin-based online gambling remains elusive. When technology creates loopholes, regulations tend to respond with further innovation—a continuous arms race of swords and shields.
Global Regulation and the Strategic Significance of the ‘GENIUS Act’
Meanwhile, the United States, eradicating its previous sluggishness, introduced a game-changing regulatory framework with the signing of the GENIUS Act by President Donald Trump on July 18, 2025. This legislation is the nation’s first comprehensive federal regulation of digital assets, establishing clear standards for stablecoin issuance, management, oversight, and consumer protection.
The White House highlights that “this legislation will position the U.S. as a global leader in digital assets,” emphasizing a multi-layered strategy that aims to strengthen the dollar’s central role, reinforce national security, and prevent illegal fund flows. Concurrently, the House-approved Clarity Act, awaiting Senate approval, aims to set international standards and solidify U.S. leadership in the global regulatory arena.
Under this ‘law of the giants,’ domestic firms and developers now have an opportunity to escape the ‘regulatory hole’ and experiment within ‘regulatory sandboxes.’ By pursuing simultaneously ‘security,’ ‘investment,’ and ‘innovation,’ the United States appears to be strategically repositioning itself to reshape the global financial order—an approach that reflects its true intention to lead global standards.
In response, South Korea must introspectively evaluate this shift. Rather than blindly imitating the U.S., it is vital to leverage its unique strengths—building resilient financial markets, establishing competitive core technologies, and fostering autonomous innovation ecosystems.
Korea must transform from a ‘Nimble Grasshopper’ to ‘Strong Foundation for Leap’
As AI Studio points out, the phrase “We are merely grasshoppers”—once a self-deprecating remark—should be set aside temporarily. Instead, now is the time to identify and develop ‘the fastest and most agile path’ to compete effectively. Hyoung-Joong Kim emphasizes that “the future of stablecoins lies in cars and AI,” offering a deep insight into the future trajectory of blockchain and cryptocurrency, transcending mere metaphors to unveil fundamental directions and practical solutions.
Viewing the historical milestones of the Industrial Revolution, the advent of the automobile in mid-19th-century Britain faced strong opposition from entrenched interests, who cited safety, cost, and public safety concerns. However, through continuous innovation, the automobile ultimately evolved into a vital industry. Similarly, AI, which initially encountered stringent skepticism exemplified by the ‘Perceptron’ limitations of the late 20th century, has experienced cycles of doubt and revival. Today’s AI breakthroughs, including deep learning and generative AI, demonstrate that persistent innovation—despite initial resistance—is crucial for future success. Professor Kim’s core message emphasizes that the key to blockchain’s sustainable future, much like cars and AI, lies in overcoming existing limitations through continuous technological and institutional evolution.
In particular, the future of stablecoins and blockchain technology mirrors the industrial revolutions of the past. Just as automobiles and AI transformed their respective landscapes, these digital innovations are poised to become essential strategic tools for survival and competitiveness. When technology advances faster than regulation, the rule of thumb must be that “regulation should come from a deep understanding of technology.” Consequently, Korea must proactively craft policies that anticipate technological evolution, fostering an environment conducive to innovation.
This is why the ‘strategic weapons’ for winning in the global arena are built on the backbone of advanced technology and robust institutional frameworks. The way forward involves persistent R&D, swift policy adjustment, and agile implementation—transforming.
South Korea from a ‘nimble grasshopper’ into a ‘solid foundation for a powerful leap.’
That is, a future where Korea secures its position through continuous technological innovation and strategic regulation is both achievable and necessary. The path to this future relies on blending the relentless pursuit of innovation, adaptive policymaking, and the courage to lead rather than follow. Only then can Korea evolve from an agile participant to a decisive leader on the global stage, ensuring sustainable growth and technological sovereignty in the fast-changing world of blockchain, finance, and beyond.
You can find the Korean version of this article here.
