South Korea's stablecoin market accelerates development, longer layout seizes opportunities

Before taking office, South Korean President Lee Jae-myung expressed support for the innovative initiative of "local currency pegged stablecoins" to enhance the competitiveness of the domestic digital financial ecosystem. As the policy environment gradually clarifies, the South Korean cryptocurrency industry has swiftly taken action: not only have major commercial banks united to prepare the Korean won stablecoin project, but traditional tech giants and Web3 companies are also making moves, striving to gain an advantage in the increasingly fierce regional and even global stablecoin competition.

At the same time, the National Assembly is reviewing the "Basic Law on Digital Assets" to provide a legal basis for private institutions to issue Korean Won stablecoins, and the financial regulatory authorities are also accelerating the establishment of operating regulations in line with international standards. It is expected that the second half of 2025 to the first half of 2026 may be a window period for the rapid growth of the Korean stablecoin market. This article systematically organizes and deeply analyzes the main participants, business models, and innovation trends in the Korean stablecoin market, focusing on several potential issuers.

Korea Bank Alliance

The Bank of Korea takes a cautious approach to stablecoins, believing that they could have a significant impact on monetary policy and the transaction settlement system. Bank Governor Lee Chang-yong stated that they are collaborating with relevant institutions to develop a regulatory framework for stablecoins, ensuring their stability and practicality, while also preventing them from being used to evade foreign exchange controls.

Under this policy guidance, the most competitive participants in the Korean won stablecoin sector are banking institutions. Bank of Korea's Senior Vice Governor Yoo Sang-dae stated that stablecoins denominated in Korean won should ideally be gradually introduced by strictly regulated commercial banks, and after accumulating sufficient experience, expand into the non-bank sector.

According to reports, eight major banks in South Korea plan to prepare for the establishment of a joint venture to issue a Korean won stablecoin. The participating banks include Kookmin Bank, Shinhan Bank, Woori Bank, Nonghyup Bank, Korea Enterprises Bank, Suhyup Bank, Citibank Korea, and Standard Chartered Bank Korea. In addition, the Open Blockchain and Decentralized Identifier Association and the Korea Financial Telecommunications and Clearing Institute will participate in coordination and collaboration.

The project team is considering two stablecoin issuance models: one is the trust model, where customer funds are first held in a trust before issuing the stablecoin; the second is the deposit token model, which links the stablecoin to bank deposits. Currently, relevant banks are discussing the joint construction of infrastructure, and after完善法律体系, it is possible that a joint venture company could be established as early as the end of this year or the beginning of next year.

Among the eight banks involved, the largest retail bank in South Korea, KB Kookmin Bank, is the most proactive. It has initiated the process of obtaining trademarks related to stablecoins, with proposed trademarks including a combination of "KB" and the Korean won symbol "KRW". As the first traditional bank in South Korea to officially enter the stablecoin field on a large scale, KB Kookmin Bank possesses a vast branch network and a large personal customer base, and may become the core leading entity of this joint venture.

As another leader in the retail market, Shinhan Bank has made multiple attempts to connect with virtual assets in recent years. It has cooperated with Hedera for a pilot project of a Korean won stablecoin and has issued virtual accounts for trading virtual assets to certain enterprises. In April of this year, the bank also participated in the "Project Pax" demonstration experiment for cross-border remittances between Korea and Japan based on stablecoins.

In addition, Woori Bank, NH Bank, and others have accumulated rich experience in CBDC testing, interbank RTGS, and blockchain projects; corporate banks have been deeply involved in SME lending and trade financing for many years; Standard Chartered and Citibank's Korean branches can provide overseas settlement and offshore liquidity support for stablecoins.

Kakao Pay and Kaia

Kakao Pay is a leading enterprise in the payment sector in South Korea, actively engaging in the layout of the Korean won stablecoin. Established in 2014, the company has rapidly developed relying on the Kakao Talk instant messaging application, and currently, its penetration rate in online and offline payments, transfers, and e-commerce settlements in South Korea has exceeded 60%.

On June 22, Kakao Pay officially launched its business layout for the Korean won stablecoin, submitting 18 trademark applications for stablecoins combined with "KRW", "K", and "P" to the Korean Intellectual Property Office, covering the fields of virtual asset financial transactions, electronic transfers, and intermediary services. Kakao Pay will actively cooperate with the legislative process of the "Digital Assets Basic Act" and seek to become one of the first compliant stablecoin issuers. The company can also leverage its traditional business advantages to closely collaborate with the ecosystem of Kakao Bank, Kakao T, and others, providing a large number of application scenarios for the stablecoin.

Kaia is an EVM-compatible Layer 1 public chain formed by the merger of Klaytn and Finschia, aimed at connecting a total of 250 million users of Kakao Talk and LINE. Sam Seo, chairman of KaiaChain, stated that they will "fully promote the issuance of the Korean won stablecoin" on the Kaia mainnet. Kaia has launched local USDT and partnered with Tether to introduce USD₮, laying the technical and ecological foundation for KRW stablecoin.

Kaia is planning a stablecoin project in collaboration with super applications such as Kakao Pay and LINE NEXT, aiming to achieve an integrated cross-chain and cross-platform circulation of "on-chain + social + payment". With the ecological synergy of the underlying public chain and terminal payment, once the policy is released, its stablecoin project can be quickly launched to seize market opportunities.

Danal

Danal, a well-established payment service provider in South Korea, is also considered a promising participant. The company launched PayCoin(PCI) in 2019 and conducted early explorations in the virtual asset payment field, but suspended operations due to unclear regulations. With the improvement of the policy environment, Danal has once again initiated its digital currency business and has submitted multiple patent applications to the Korean Patent Office for "POS terminals supporting virtual asset payments and their operational methods."

Danal has technical advantages: its POS terminal can directly identify and settle on-chain tokens, simplifying the user payment path; the backend system can seamlessly integrate with off-chain reserve management, providing conditions for compliance auditing and reserve proof.

Nexus

The blockchain startup Nexus has expressed its desire to become the first issuer of a Korean won stablecoin. The company has issued a Korean won stablecoin named KRWx on the BNB Chain and has submitted a trademark registration application to the Korean Patent Office. It has also applied for trademark registrations for fiat stablecoins such as the US dollar, Japanese yen, and euro.

Nexus CEO Jang Hyun guk stated that the choice to pre-launch KRWx on the BNB Chain is to establish a first-mover advantage and will continue to launch more fiat-backed stablecoins. The company also plans to set up a subsidiary in Hong Kong, Nexus Stable HK, to promote the internationalization of stablecoins.

Other Potential Participants

Samsung SDS's Nexledger, as a mature enterprise-level private blockchain solution, has the core features required for stablecoins. It is widely believed that once the issuance plan is finalized, its technical preparations will be nearly complete. Samsung SDS is seen as one of the potential "infrastructure providers."

LG CNS, as the official contractor for the wholesale CBDC/tokenized deposit system of the Bank of Korea, possesses core capabilities in on-chain asset management. With the advancement of relevant regulations, LG CNS can seize the role of infrastructure provider through technology output.