Korean Won Stablecoin Race Begins: Banks, Tech Giants, Web3 Companies, Who Will Take the Lead?

Original Article Title: "The Battle for the Korean Won Stablecoin Begins: Banking Alliance, Tech Giants, Web3 Enterprises Join the Fray, Who Will Take the Lead?"

Original Article Author: Zen, PANews

Before his official inauguration, South Korean President Lee Jae-myung explicitly proposed his support for the "local currency-pegged stablecoin" as an innovative measure in his campaign platform, aiming to curb capital outflow and enhance the country's digital financial ecosystem's competitiveness. After Lee Jae-myung's government took office, the South Korean cryptocurrency industry immediately became active: not only did eight major commercial banks prepare to launch a Korean Won stablecoin joint project, but traditional tech giants and Web3 enterprises also swiftly entered the scene, seeking to take the lead in the increasingly fierce regional and global stablecoin competition.

At the same time, the National Assembly is deliberating on the "Digital Asset Basic Law," which will provide a legal basis for private institutions to issue Korean Won stablecoins, and financial regulatory authorities are accelerating the establishment of operation standards aligned with international practices. Therefore, it can be seen that the period from the second half of 2025 to the first half of 2026 may witness an "explosive" growth of the Korean stablecoin market. This article from PANews systematically analyzes the key participants, business models, and innovation trends in the Korean stablecoin market, focusing on several potential issuers.

Korean Banking Alliance

Due to the significant impact that introducing stablecoins may have on monetary policy and the payment settlement system, the Bank of Korea, while recognizing the innovation and facilitative role of stablecoins in the financial technology field, has been cautious about whether stablecoins can serve as a substitute for legal tender. Bank of Korea Governor Lee Ju-yeol stated in mid-June that the central bank is cooperating with relevant institutions to establish a regulatory framework for stablecoins to ensure their stability and utility while preventing them from being used to circumvent foreign exchange controls. Lee Ju-yeol also expressed a cautious attitude toward Korean Won stablecoins.

Bank of Korea Governor Lee Ju-yeol

Under this cautious policy orientation, in the Korean Won stablecoin race, the most competitive participants at present are non-bank institutions. According to Reuters, on June 24, Bank of Korea Senior Deputy Governor Ryoo Sang-dai stated in a press conference that a stablecoin denominated in Korean Won would be best introduced gradually and should be initially issued by strictly regulated commercial banks. Once enough experience has been accumulated, it can then be gradually expanded to the non-bank sector to prevent impacts on monetary policy and the payment system.

On June 25, South Korean media Economy Review reported that eight major banks in Korea plan to establish a joint venture company to issue a Korean Won stablecoin. The participating banks include KB Kookmin Bank, Shinhan Bank, Woori Bank, NH NongHyup Bank, Industrial Bank of Korea, Suhyup Bank, Citibank Korea, and Standard Chartered Korea. In addition, the Open Blockchain and Decentralized Identity Association (OBDIA) and the Korea Financial Telecommunications & Clearings Institute (Responsible for Korea's interbank payment infrastructure, known as KFTC) will participate in coordination and cooperation.

It is reported that the project team is considering two stablecoin issuance models, one being the Trust Model, where customer funds are first held in trust before issuing the stablecoin; and the other being the Deposit Token Model, where the stablecoin is pegged to bank deposits. Currently, the aforementioned banks are in discussions on jointly building the infrastructure, and after finalizing the legal framework, the establishment of a joint venture company could possibly take place by the end of this year or early next year.

According to disclosed information, among the eight banks mentioned, South Korea's largest retail bank, KB Kookmin Bank, is the most actively participating institution in the stablecoin landscape. It has taken the lead in initiating the process of acquiring trademarks related to stablecoins, intending to apply for trademarks such as 'KBKRW,' 'KRWKB,' 'KBST,' and 'KRWST' which combine the 'KB' and Korean Won symbol 'KRW.' This move by KB Kookmin Bank marks the first official large-scale entry of a traditional Korean bank into the stablecoin field. The bank has over 1,000 branch networks and a large individual customer base, making it a key leading party in the establishment of the joint venture company concerning both business scale and strategic positioning.

Shinhan Bank, alongside KB Kookmin Bank, is a co-leader in the South Korean retail market and has made several attempts in recent years to align with virtual assets. It previously collaborated with Hedera in 2021 to pilot a Korean Won stablecoin to ascertain the possibility of issuing and distributing stablecoins for financial use cases at lower costs and shorter completion times compared to the existing system, while also enabling traceability of transactions. In 2022, Shinhan Bank also issued virtual accounts to some companies that can trade virtual assets. In April of this year, the bank participated in the stablecoin-based Korea-Japan cross-border remittance demonstration experiment – 'Project Pax' initiated by Japan's Programat, Korea's Fair Square Lab, and Korea Digital Asset Custodian (KDAC) – aiming to leverage digital assets to build the next-generation global remittance and payment system.

In addition, Woori Bank, NH Nonghyup Bank, among others, have rich experience in international payments, have played significant roles in CBDC tests, interbank RTGS, and blockchain projects; corporate banks have deep expertise in SME lending and trade finance, providing cost advantages for enterprise-level application scenarios; Standard Chartered, Citibank Korea branches are backed by their parent companies' international networks and may provide overseas clearing and offshore liquidity support for stablecoins.

Kakao Pay and Kaia

As a leading company in the South Korean payment sector, Kakao Pay is arguably the most proactive among major players in the Korean Won stablecoin landscape.

Established in 2014, Kakao Pay leverages the Kakao Talk instant messaging app, achieving over 10 million users in just 20 months and securing a $2 billion strategic investment from Ant Financial in 2017, establishing its leading position in the South Korean mobile payment market. By mid-2025, Kakao Pay's penetration rate in South Korea's online and offline QR code payments, P2P transfers, and e-commerce settlement scenes has exceeded 60%. In terms of market share and active user base, its position in South Korea can be compared to Alipay and WeChat Pay in China.

After the appointment of a pro-cryptocurrency Lee In-ming, the Kaia team quickly announced a partnership with super apps such as Kakao Pay and LINE NEXT to launch a Korean won stablecoin. Upon this news, Kakao Pay's stock price surged nearly 30%. On June 22, Kakao Pay officially launched its Korean won stablecoin business layout, aiming to seize the stablecoin market opportunity. According to the South Korean media outlet "Seoul Economy," Kakao Pay has submitted 18 trademark applications to the Korean Intellectual Property Office for stablecoin combinations using "KRW," "K," and "P" such as "KRWKP" and "KWRP," covering the fields of virtual asset financial transactions, electronic transfers, and intermediary services, indicating its high expectations for the stablecoin business.

Kakao Pay will proactively cooperate with the legislative process of the "Digital Asset Basic Law" to become one of the first compliant stablecoin issuers after the regulations are in place. Kakao Pay will also leverage its traditional business advantages to work closely with the parent company ecosystem including Kakao Bank and Kakao T, achieving deep integration of social, payment, and financial services to provide extensive application scenarios for the stablecoin.

Kaia is an EVM-compatible Layer 1 public chain formed by the merger of Klaytn (a Kakao subsidiary Ground X) and Finschia (a LINE subsidiary) in August 2024, aiming to connect Kakao Talk and LINE's combined 250 million users. In early June 2025, KaiaChain's Chairman Sam Seo clearly stated on social media that they will "comprehensively promote the issuance of the Korean won stablecoin" on the Kaia mainnet, and said, "The stablecoin summer has just begun." Earlier, Kaia had launched the local USDT and collaborated with Tether to introduce USD₮ into the Kaia ecosystem, laying the technical and ecological foundation for the subsequent KRW stablecoin.

Kaia is collaborating with super apps like Kakao Pay and LINE NEXT to plan stablecoin projects, aiming to achieve the integration of "on-chain + social + payment" cross-chain and cross-platform circulation. With the ecological synergy between the underlying public chain and terminal payments, once policies are in place, their stablecoin project can quickly go live to seize the market opportunity.

Danal

The well-established South Korean payment service provider Danal is also a widely anticipated participant. Back in 2019, it launched PayCoin (PCI) and undertook early explorations in the field of virtual asset payments. PayCoin once had over 1 million registered users in multiple offline and online merchants. However, due to unclear regulations at the time, the project was eventually suspended due to obstacles in VASP (Virtual Asset Service Provider) registration.

As the South Korean government accelerates the legislative process of the "Digital Assets Basic Law" and clearly supports the policy direction of anchoring the local currency to stablecoins, Danal has once again initiated its digital currency business. According to MK reports, Danal submitted multiple patent applications for "POS terminals supporting virtual asset payments and their operation methods" to the Korean Intellectual Property Office in June 2025, aiming to provide underlying technical support for potential stablecoin payment scenarios in the future.

Technically, leveraging its years of accumulated POS terminal network and payment settlement system, Danal has a natural advantage in the stablecoin business process. On the one hand, its POS terminals can directly identify and settle on-chain tokens, simplifying the user payment path; on the other hand, its backend systems for merchant settlement can seamlessly integrate off-chain reserve management, providing a prerequisite for compliance auditing and reserve proof.

Nexus

Blockchain startup Nexus, on the day Kakao Pay officially entered the stablecoin race, also expressed its desire to become the first issuer of a Korean won stablecoin.

According to ZDNet Korea, Nexus has issued a Korean won stablecoin named KRWx on the BNB Chain and has filed a trademark registration application with the Korean Intellectual Property Office. Additionally, they have simultaneously submitted trademark applications for fiat currency stablecoins such as the U.S. dollar (USDx), Japanese yen (JPYx), and Euro (EURx).

Nexus CEO Jang Hyun-guk stated that they chose to pre-release KRWx on the BNB Chain to establish a first-mover advantage and declared their intention to continue launching more fiat-pegged stablecoins, emphasizing that the "reason for the existence of stablecoins is practicality" and their opportunity in the globalized digital economy.

Nexus CEO Jang Hyun-guk

Furthermore, gaming media G-Ennews reported that Nexus is preparing for the issuance of "KRWx" and other fiat-pegged stablecoins and plans to establish a Hong Kong subsidiary, Nexus Stable HK, to leverage its advantages in Hong Kong law and trading markets, promoting the internationalization of stablecoin deployment.

Other Potential Participants

Samsung SDS, a subsidiary of the Samsung Group specializing in IT solutions and system integration, launched Nexledger, one of the most mature enterprise private chain solutions in the Korean market, supporting multi-party signatures, cross-chain interoperability, and high-performance throughput. Industry insiders believe that Nexledger already possesses the three core characteristics required for stablecoins: "traceability + high reliability + auditability." Once the internal or partner issuance plans are finalized, the technical groundwork is almost ready.

According to Chosun English, against the backdrop of South Korea's upcoming policy to allow the issuance of a stablecoin pegged to the local currency, Samsung SDS has been identified as a potential "infrastructure provider," with its corporate clients potentially issuing or custoding stablecoins through Nexledger.

Similarly, benefiting from its robust underlying infrastructure, LG's IT solution and system integration subsidiary, LG CNS, is also seen as a potential participant and beneficiary. LG CNS has been selected as the official contractor for the Bank of Korea's (BOK) wholesale CBDC/tokenized deposit system, undertaking the construction of an open blockchain platform with a project budget of approximately 9.68 billion South Korean won, covering the period from the 3rd quarter of 2024 to March 2025.

As a core supplier of wholesale CBDC and digital currency solutions, LG CNS possesses key capabilities in on-chain asset management such as minting, clearing, auditing, and custody. With the advancement of the "Digital Asset Basic Law," private institutions will gradually qualify for stablecoin issuance, allowing LG CNS to secure the role of an infrastructure provider through technological expertise.

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