[Editorial] Are Stablecoins a "Trojan Horse"?

The warning letter from Washington’s political circles in the United States is chilling. Congressman Warren Davidson’s pointed criticism of the “Genius Act” passed in 2025 raises fundamental questions about the so-called “innovation”—the essence of stablecoins—that we are now trying to believe in and accept. He characterizes the bill as a “Trojan horse,” ostensibly aimed at fostering the stablecoin market, but in reality allowing the government and banks to scrutinize and control all individual financial activities under a microscope.

Congressman Davidson’s insights cut straight to the illusion of digital finance. The “account-based” system mandated by the Genius Act stifles the fundamental reason for the existence of cryptocurrencies—decentralization. This is not “digital cash” that allows us to hold and transfer funds freely; rather, it records our funds on bank and government ledgers, which must be approved before we can move them—digital shackles. Ultimately, this paves the way for a digital identity system that leads to a surveillance framework for central bank digital currencies with authoritarian characteristics.

For a long time, our organization has advocated for the swift introduction of the Korean won stablecoin to protect South Korea’s “monetary sovereignty” amid the erosion of digital asset markets by dollar hegemony. But today, we must once again and very seriously revise the fundamental premise of this stance. Compared to the nation’s “monetary sovereignty,” the absolute value that should take precedence is each citizen’s “financial sovereignty.”

If stablecoins operate on a system that the government can monitor 24/7 and freeze citizens’ wallets at will, then they are not true money. They are no different from citizens walking into high walls and imprisoning themselves under the watchful eyes of authoritarian power. As Congressman Davidson warns, this system, wrapped in the guise of “convenience” and “protection,” is merely a “illusory illusion of freedom.” Once this Trojan horse is brought through the gates, the “Big Brother” hiding inside will trample on our private autonomy and privacy.

What we should be wary of is not the technology itself, but the desire for power to monopolize and turn it into a means of control. If trends like the Genius Act are transplanted into Korea’s financial authorities unchanged, we will lose the last bastion of citizen privacy—anonymity—in the name of a “cashless society.” A financial system that deprives individuals of the full right to own their assets is itself a disaster.

Therefore, we call for balance. We must seriously consider the spirit of the “Clear Act” proposed by Congressman Davidson as an alternative. Regulation is necessary, but regulation should serve the integrity of the system, not strip individuals bare for surveillance. Stablecoins should not become the embodiment of bank accounts but should serve as substantive “cash” in the digital world, safeguarding privacy and self-sovereignty.

Before financial authorities and legislators rush to introduce this giant Trojan horse wrapped in the guise of “innovation,” they must calmly ask themselves: Is this truly a tool serving the people, or a control device designed to dominate them? Prior to discussing monetary sovereignty, the country’s duty is to build a digital infrastructure that allows citizens to fully control their assets—an enduring “personal sovereignty.” Without free innovation, there is no innovation; there is only oppression.