Core Viewpoint - The proposed merger between Dunamu, operator of Upbit, and Naver faces five significant legal hurdles that must be overcome for the deal to proceed, despite the potential to create a major player in the crypto-tech sector in East Asia [1][2]. Group 1: Legal Hurdles - Hurdle 1: Traditional Finance Regulations - South Korean regulators have imposed guidelines that effectively prevent traditional financial companies from engaging in crypto-related business, which poses a challenge for the merger [3]. - Hurdle 2: Stablecoin Legislation Uncertainty - The merger aims to facilitate the issuance of won-denominated stablecoins, but there is significant political and regulatory division regarding stablecoin legislation, which could hinder progress [4][5]. Group 2: Market Context - Upbit holds a dominant position in the South Korean crypto market, capturing approximately 72% of the market share, which highlights the strategic importance of the merger for both companies [1]. - Naver's interest in merging its financial unit with Dunamu is driven by the potential to enhance its payment ecosystem through the use of stablecoins, which could significantly expand its market presence [4][5].

Legislative Progress & Impact - Two separate crypto measures are advancing in Congress, including stablecoin and market structure legislation, with the House committed to passing both before the August recess [2][3] - The simultaneous movement of these two pieces of legislation is considered a pivotal and historic moment for the crypto industry [4] - The legislation aims to provide a regulatory framework for the crypto industry, offering clarity and safeguards that were previously lacking [5][6][8] Regulatory Environment - The industry faced a hostile regulatory environment with enforcement actions despite efforts to comply with regulations [5][7] - The new framework allows the industry to come under regulatory supervision, providing certainty for innovators and safeguards for market participants [8][9] Stablecoin & Dollarization - Stablecoin legislation is crucial for national security, ensuring the U S dollar backs stablecoins [10] - The U S aims to remain the primary location for stablecoin issuers and the preferred currency backing for these coins [10]

Group 1 - The U.S. Senate passed a stablecoin bill with a vote of 68 to 30, establishing regulatory rules for cryptocurrencies pegged to the dollar, marking a significant victory for the emerging crypto industry and former President Donald Trump [1][2] - The market value of stablecoins related to Trump has reached $2 billion, with the House of Representatives working on its own legislation to regulate the broader crypto market [2] - The legislation mandates that stablecoins pegged to the dollar must hold short-term government bonds or similar products at a one-to-one ratio, aiming to make stablecoins a mainstream payment method [2][3] Group 2 - Stablecoins have become a lucrative business, with major issuer Tether Holdings SA earning billions from its reserves, and the new law could allow tech companies and large non-financial firms to issue their own stablecoins [3] - Efforts to amend the bill in the Senate failed, including proposals related to consumer protection and potential government bailouts for stablecoin issuers [3] - Supporters, including the President and Treasury Secretary, advocate for dollar-pegged stablecoins, suggesting they could increase global demand for the dollar and U.S. bonds [3]