[Economy Pulse] Samsung's Blockchain Experiment and the 'Lost Eight Years' of the Korean Economy

Samsung Electronics recently announced plans to integrate the Coinbase application with the Samsung Wallet on Galaxy smartphones, supporting digital asset trading and stablecoin payments in North America. Going forward, Galaxy users will be able to buy, sell, and make payments with digital assets directly within the Wallet. Furthermore, last year, Samsung's venture investment arm, Samsung Next, invested in Berachain, a blockchain developer specializing in decentralized finance (DeFi) and real-world asset (RWA) tokenization, clearly signaling its intent to secure a leading position in future financial infrastructure.

The problem is that such business initiatives and investments are practically impossible in South Korea. The reason lies in the so-called "separation of finance and virtual assets" principle. This shadow regulation has remained firmly in place since 2017, when financial authorities issued administrative guidance prohibiting companies and pension funds from investing in digital assets amid the virtual asset investment boom. As a result, most domestic companies face a rigid reality where even attempting to invest in digital assets or launch related new businesses is extremely difficult.

Meanwhile, the rest of the world is changing at a breakneck pace. In July of this year, President Donald Trump signed the GENIUS Act in the United States, officially bringing stablecoins into the regulatory framework. This legislation places privately issued stablecoins under federal oversight while allowing them to be used as part of the dollar payment infrastructure. This is a clear declaration by the United States to expand dollar hegemony into the digital realm.

Moreover, the Trump administration and some listed companies in the United States and Japan are formalizing digital asset reserve strategies. Currently, about 55% of stablecoins circulating worldwide are processed on the Ethereum network. Ethereum enables global fund transfers within seconds, creating a next-generation financial infrastructure that is much faster and more cost-effective than the systems that Visa and Mastercard have spent hundreds of billions of dollars building over decades. In this sense, proper investment in digital assets is akin to an early-stage investment in payment infrastructure companies like Visa.

However, over the past eight years, South Korean politicians and authorities have responded to digital assets with a regulatory-only approach, making statements such as "another Sea Story" and "no intrinsic value." As a result, domestic innovative companies could only watch as companies like Circle and Coinbase, with market capitalizations of tens of trillions of won, emerged in the United States. Pension funds and financial institutions also hesitated to enter the rapidly growing digital asset market due to concerns about government scrutiny.

For Samsung Electronics to compete with global giants like TSMC and Apple, bold investment in and adoption of blockchain technology and digital assets is essential. According to one analysis, if Samsung Electronics were to settle internal transactions between its global subsidiaries using stablecoins, it could save over 100 million dollars (approximately 140 billion won) annually by reducing overseas remittance and currency exchange fees. If this were expanded to the broader South Korean economy, which is highly dependent on exports, the economic impact could reach several trillion to tens of trillions of won per year, providing a powerful growth engine for the KOSPI to reach 5,000 points.

Yet South Korea remains stuck in the outdated framework of 2017. While Samsung Electronics' Wallet functionality is recognized as financial innovation globally, it remains a cautious and even taboo area domestically.

In 1995, Chairman Lee Kun-hee famously said, "Corporations are second-rate, administration is third-rate, and politics is fourth-rate," and criticized, "Does it make sense that it takes a thousand stamps to build a semiconductor factory?" As the world fiercely competes in innovation, our current situation raises questions about how much progress South Korean politics and administration have made over the past 30 years.

In the next 30 years, we will face changes dozens of times faster than those of the past three decades. The government must first remove the shackles of the past. It must clarify its stance on the validity of the 2017 administrative guidance on virtual assets, which has stifled innovation without legal basis, and fundamentally prohibit all shadow regulations. Furthermore, to enable companies to compete on equal footing in the global market, the government must promptly pass digital asset legislation within the year and provide clear guidelines on corporate investment eligibility and accounting standards. This must be done before we witness the absurdity of South Korean citizens being excluded from stablecoin payments on Galaxy phones while the rest of the world enjoys the benefits.

Seo Byungyoon, Director of Future Finance Research Institute, DSRV Labs