Capital controls across Asia hinder the development of stablecoins, with most regional currencies unable to circulate globally. In contrast, Hong Kong's dollar, an autonomous currency fully convertible and unrestricted, emerges as a viable stablecoin option. The discussions around a Korean Won stablecoin gain attention during Korea Blockchain Week, aiming to strengthen local currency use while reinforcing monetary sovereignty. However, Korean lawmakers are cautious, restricting offshore use due to historical capital flight concerns. Despite potential innovations, without a framework similar to Hong Kong's special status, a KRW stablecoin would be limited to domestic markets. Other Asian currencies face similar challenges, limiting their international utility. Only the Hong Kong dollar stands out, given its established role in the international financial market, making it an attractive model for other countries aspiring to develop digital currencies. Regional policymakers must consider liberalizing capital controls to allow local currencies to effectively compete with dominant U.S. dollar-backed stablecoins.

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