Read the original article: https://www.edaily.co.kr/News/Read?newsId=02542006645419072&mediaCodeNo=257
[Digital Assets — Finding the Way] <9> Dave Shin, COO of KRWQ
- IQ and FRAX issue the first offshore KRW stablecoin, KRWQ
- "Won has high trading volume but onshore access is restricted"
- "The current NDF market is already outside regulatory visibility — it needs to move on-chain"
- "If relevant legislation passes, it can enter the institutional framework — onshore issuance also planned"
- "Goal is to capture meaningful share of the $27B KRW NDF market"
"The current offshore Korean won non-deliverable forward (NDF) market is already operating outside the scope of regulatory visibility. Moving it on-chain doesn't create a new blind spot — it actually increases transparency."
Dave Shin, Chief Operating Officer of KRWQ, made this statement in an interview with Edaily on April 17, discussing KRWQ's role in the approximately $27 billion NDF market. KRWQ is the first offshore Korean won stablecoin, issued by blockchain technology company IQ and Frax Finance.
This month, KRWQ was listed on EDX Markets — an institutional-only digital asset exchange backed by major Wall Street firms including Citadel Securities and Fidelity Digital Assets. It became the first non-dollar stablecoin to support both spot and derivatives (perpetual futures) trading in an integrated manner. The won-pegged perpetual futures product uses KRWQ and the dollar stablecoin USDC, with profit and loss determined by KRW/USD exchange rate movements.
Shin, a traditional finance veteran turned digital asset specialist with over 15 years of trading and structured products experience at Barclays, Morgan Stanley, and Standard Chartered, is at the center of KRWQ's issuance. He explained: "The won is a currency with high trading volume, but onshore access is restricted, creating substantial offshore demand. Stablecoins can fill that gap."
KRWQ specifically targets the KRW NDF market. The pitch is that by providing 24-hour pricing and enabling trading and settlement directly on-chain via stablecoin, transaction costs can be reduced by 50–75% compared to traditional KRW NDFs. Shin also argued that KRWQ differentiates itself on transparency.
"The current KRW NDF market operates mostly through offshore over-the-counter (OTC) transactions, resulting in low transparency due to reporting delays," he said. "On-chain transactions can actually provide a higher level of transparency through real-time verification, reserve monitoring, and KYC." He added: "If the framework operates stably, it can naturally create a pathway for offshore activity to return onshore — and that is a service that Korea's capital markets genuinely need."
NDFs are offshore derivatives in which parties don't exchange actual won; instead, only the difference between the agreed rate and the rate at maturity is settled in dollars. They serve as a workaround for markets where capital controls restrict free cross-border currency movement. While they absorb offshore won demand, they also influence KRW/USD volatility by reflecting exchange rate expectations outside the reach of foreign exchange authorities. For regulators, the NDF market is necessary but difficult to manage — and KRWQ is positioning itself as a new alternative.
Shin stated: "Our goal this year is to deepen liquidity, expand institutional counterparties, and complete the partnerships needed for KRWQ to be used wherever institutional desks trade and hedge in won." He added: "We aim to become the global digital financial market's core rail — the on-chain reference point for the Korean won."
Q&A with Dave Shin, COO
Q: What brought you to the KRWQ project?
My career sits at the intersection of traditional finance and digital assets. Having worked for over 15 years at TD Bank, Barclays, Morgan Stanley, and Standard Chartered in regional trading, market access, and structured products, KRWQ was something I had long been waiting for. This isn't a retail experiment — it's a project built on institutional-grade infrastructure to bring the won on-chain. When the opportunity came to lead KRWQ's operations and co-design the market entry strategy, IQ had secured Frax as an appropriate technology partner and had a clear regulatory framework: an offshore strategy targeting the global KRW FX market. IQ has also built credibility in the Korean digital asset market since launching in Seoul in 2018 and listing on major exchanges like Upbit and Bithumb. That's not just a track record — it's years of accumulated market trust.
Q: How are IQ and Frax structured in the issuance of KRWQ?
IQ is the founding issuer of KRWQ and is responsible for overall commercial operations, including product strategy, distribution, market development, and communication with counterparties and regulators. Fees and cash flows generated by KRWQ flow to the IQ token, meaning token holders have direct economic exposure to the growth of the Korean won stablecoin ecosystem. This is significant because anyone can participate in the early growth of the world's first won stablecoin. Frax is the stablecoin infrastructure partner, providing a proven issuance and redemption framework, reserve management, and cross-chain capabilities. IQ focuses on the commercialization and expansion of KRWQ on top of that foundation.
Q: KRWQ is the first non-dollar stablecoin listed on EDX Markets. Why was Korean won — and KRWQ — chosen among Asian currencies?
EDX's choice of won as its first non-dollar currency came down to two reasons. First, strong demand with limited access: the won has very high trading volume among emerging market currencies, but onshore access is restricted — exactly the gap a stablecoin can fill. Other Asian currencies either don't have this level of offshore demand or already have deeper deliverable markets. Second, issuer readiness: EDX requires institutional-grade reserves, transparency, and operational stability, and KRWQ met those standards. Having a clear, transparently backed structure and a team that met compliance expectations was also important.
Q: What strategic advantages does KRWQ offer global hedge funds and macro traders?
The KRW NDF market is constrained by bank operating hours, so outside Asian sessions, liquidity thins, spreads widen, and hedging costs rise. KRWQ provides continuous 24-hour liquidity on-chain, allowing institutions to manage won exposure more precisely and trade at tighter prices at any time. For Korean exporters and corporates, it also offers a more efficient settlement mechanism — reducing the costs and time built into traditional correspondent banking networks. There are also significant capital efficiency advantages. Rather than being tied up in credit lines and margin cycles like bilateral NDFs, won exposure itself becomes a tokenized, transferable asset that can be more easily reallocated and integrated across various markets.
Q: What is the structural difference between KRWQ perpetual futures and NDFs? How do you see on-chain trading changing FX market structure?
Transaction costs can be reduced by 50–75% compared to traditional NDFs. This is because rather than fragmenting liquidity, we concentrate it among a small number of institutional exchanges and skilled market makers. EDX serves as the institutional distribution channel, while on-chain liquidity on Aerodrome on Base and Curve FX Swap on Ethereum and Polygon provides a 24-hour pricing environment. The next step is to deepen the order book, expand market makers, and attract institutional capital. EDX handles the institutional side, while the DEX layer supports 24-hour liquidity. The goal is to capture market share in the $27 billion KRW NDF market. Even a small portion of that, brought on-chain through KRWQ's trading infrastructure, would be a meaningful starting point. As spreads narrow and liquidity deepens, growth will accelerate further.
Q: Amid the recent Korean stock market rally, there's talk of KRWQ absorbing KRW FX hedging demand. What are you seeing?
There's real demand. When foreign investors increase their KOSPI exposure, ongoing won hedging demand naturally arises — and until now, that's mostly been met through NDFs or onshore FX. KRWQ allows that hedging to be done programmatically on-chain. You can keep it alongside equity positions, adjust intraday, and unwind without a separate settlement process. The flow we're seeing is not directional FX speculation — it's demand for managing won exposure. It can also be a more efficient, lower-cost hedging tool for Korean exporters and corporates.
Looking ahead, larger shifts are coming. Tokenized equities are emerging through platforms like Coinbase and Hyperliquid, and Korean stocks will naturally be included in that. This could give Korean companies direct access to global capital, lower their cost of capital, and broaden their investor base. When that happens, currency pairing becomes crucial. Korean equity liquidity is mostly denominated in won — if dollar pairs become the default, liquidity fragments, FX costs rise, and structural demand for won weakens. A won stablecoin would allow that market to develop more naturally within its native currency framework, benefiting Korean companies too.
Q: Financial and foreign exchange authorities have raised concerns that an offshore-issued KRW stablecoin could actually expand regulatory blind spots.
I understand that concern, but we see it differently. The current KRW NDF market itself is already largely outside real-time regulatory visibility — most of it is traded offshore OTC, with delayed or absent reporting. That is where the blind spot actually is. On-chain settlement, by contrast, provides a different form of transparency. Transactions are verifiable in real time, reserves can be monitored, and participants go through KYC. This transparency structure is fundamentally different from bilateral NDFs. The core question isn't whether new blind spots are being created, but how to bring visibility to flows that are currently opaque. We believe on-chain infrastructure can play that role, and we think Korea's financial authorities should be having policy discussions in that direction. Our approach is to build a structure aligned with regulatory objectives and contribute to a more transparent and functional won market.
Q: How do you view the delay in stablecoin legislation in Korea? How do you plan to respond to changes in the domestic regulatory environment?
Korea is taking a very careful but meaningful approach to digital asset regulation. The Digital Asset Basic Act is an important development and we're watching it closely. KRWQ was designed from the beginning with onshore compatibility in mind. The current offshore structure fits how the market actually operates, while also adding transparency to won flows that are currently outside regulatory visibility. Our goal is to work closely with Korean financial institutions and regulators to demonstrate what auditable, institutionally structured won settlement can look like — and to have that contribute to the direction Korea's digital asset market evolves. We have relevant experience here: Frax founder Sam Kazemian has contributed to the US GENIUS Act and has direct understanding of how regulators view reserves, issuer standards, and systemic risk. We also view it as an encouraging signal that Rep. Min Byung-deok of the Democratic Party mentioned KRWQ at his seminar on "Tasks for Designing a Stablecoin Regulatory Framework: Analysis of Overseas Cases and Response Strategies."
Q: What are the plans for direct domestic issuance of a won stablecoin in Korea, or for fully converting KRWQ's reserves to a won-based structure?
For now, the focus is on offshore won transaction flows. The approximately $27 billion KRW NDF market mostly operates outside the scope of Korean regulation, and we believe KRWQ can serve as infrastructure that adds transparency and efficiency to those flows. If we execute well, that can naturally create a pathway for some or much of the offshore activity to return onshore — and that's a service that Korea's capital markets actually need, which is also the direction we're focusing on now.
On the reserve composition side, we're already moving toward increasing the won-denominated share. We're working with major Korean issuers to diversify reserves into won-denominated digital assets, and we're working to maintain reserve balance in line with overall objectives. This is not a distant future plan — it's part of an active build process underway right now. We're also keeping the door open for direct onshore issuance. Korea's regulatory environment is evolving carefully, and we're watching it closely and engaging where appropriate. Long-term, our goal is for KRWQ to become the most trusted on-chain representation of the Korean won, and how that structure looks will naturally evolve in line with what domestic regulation and banking infrastructure allows. We intend to prove that role through performance and constructive engagement with regulators.
Q: What are your short- and long-term goals in the digital asset market?
This year is a year of execution. The goal is to deepen liquidity, expand institutional counterparties, and complete the partnerships needed for KRWQ to be used wherever institutional desks trade and hedge in won. In the medium term, it's to become the on-chain reference point for the Korean won and capture meaningful market share in the $27 billion KRW NDF market. As regulation evolves, KRWQ is well-positioned to naturally expand into onshore participation.
The long-term vision is broader. A large-scale, highly liquid, globally held KRW stablecoin can create structural demand for Korean government bonds, lower yields, and contribute to reducing borrowing costs for the government, corporates, and ultimately all Koreans. At the same time, a more efficient FX structure can cut costs for exporters and corporates. KRWQ is the infrastructure that makes all of this possible. The core is to build the key rail for Korea's economy in global digital markets — one that matches Korea's economic scale. As KRWQ grows, those cash flows accrue to the IQ token, and anyone can own a piece of that growth.
