The South Korean stablecoin market is poised for takeoff: multiple parties competing, who will take the lead?

South Korean President Lee Jae-myung has clearly supported the innovative measure of "local currency-linked stablecoins" in his campaign program, aimed at curbing wealth outflow and enhancing the competitiveness of the country's digital financial ecosystem. With the Lee Jae-myung government taking office, the South Korean cryptocurrency industry has begun to revitalize: eight major commercial banks are preparing to launch a joint project for a KRW stablecoin, while traditional tech giants and Web3 companies are also making moves, striving to gain an advantage in the increasingly fierce competition for stablecoins both regionally and globally.

At the same time, Congress is reviewing the "Basic Law on Digital Assets" to provide a legal basis for private institutions to issue Korean won stablecoins, and financial regulatory authorities are also accelerating the establishment of operating standards in line with international practices. The second half of 2025 to the first half of 2026 may be a window period for the "explosive" growth of the Korean stablecoin market.

Bank Alliance of Korea

The Bank of Korea has been concerned about whether stablecoins can serve as a substitute for legal tender. Central Bank Governor Lee Chang-yong stated that they are working with relevant institutions to develop a regulatory framework for stablecoins to ensure their stability and practicality, while also preventing them from being used to circumvent foreign exchange controls.

Under this cautious policy direction, banking institutions have become the most competitive participants in the Korean won stablecoin sector. Bank of Korea Senior Vice Governor Yoo Sang-da stated that stablecoins denominated in Korean won should first be issued by strictly regulated commercial banks, and after accumulating experience, gradually expand into the non-bank sector.

According to reports, eight major banks in South Korea plan to prepare to establish a joint venture to issue a Korean won stablecoin. The participating banks include Kookmin Bank, Shinhan Bank, Woori Bank, NongHyup Bank, Korea Industrial Bank, Suhyup Bank, Citibank Korea, and Standard Chartered Bank Korea. The Open Blockchain and Decentralized Identifier Association and the Korea Financial Telecommunications and Clearing Institute will participate in coordination and cooperation.

The project team is considering two stablecoin issuance models: trust model and deposit token model. The aforementioned banks are discussing the joint construction of infrastructure, and after improving the legal system, a joint venture company may be established as early as the end of this year or the beginning of next year.

KB Kookmin Bank, as the largest retail bank in South Korea, has taken the lead in initiating the process to obtain trademark rights related to stablecoins. Shinhan Bank, on the other hand, has been collaborating with Hedera on a pilot project for a Korean won stablecoin since 2021 and participated in the stablecoin-based Korea-Japan overseas remittance demonstration experiment "Project Pax" in April this year.

Kakao Pay and Kaia

Kakao Pay, as a leading enterprise in the payment sector in South Korea, is undoubtedly the most proactive among major companies in the layout of the Korean won stablecoin. By mid-2025, Kakao Pay's penetration rate in online and offline QR code payments, P2P transfers, and e-commerce settlement scenarios 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 the "KRW" "K" "P" combination to the Korean Intellectual Property Office. Kakao Pay will actively cooperate with the legislative process of the "Digital Asset Basic Law" in order to seek to become one of the first compliant stablecoin issuers after the regulations are implemented.

Kaia is an EVM-compatible Layer 1 public chain formed by the merger of Klaytn and Finschia in August 2024. KaiaChain Chairman Sam Seo said that the KRW stablecoin issuance will be "fully promoted" on the Kaia mainnet. Kaia cooperates with super apps such as Kakao Pay and LINE NEXT to plan stablecoin projects, aiming to achieve cross-chain and cross-platform circulation of "on-chain + social + payment" integration.

Danal

The South Korean veteran payment service provider Danal launched PayCoin in 2019, conducting early explorations in the virtual asset payment field. With the policy direction becoming clear, 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 operation methods."

Danal leverages its years of accumulated POS terminal network and payment settlement system, possessing inherent advantages in the business process of stablecoins. Its POS terminals can directly recognize and settle on-chain tokens, simplifying the user payment path; the backend system can seamlessly connect with off-chain reserve management, providing prerequisites for compliance audits and reserve proofs.

Nexus

The blockchain startup Nexus has issued a Korean won stablecoin named KRWx on the BNB Chain and has submitted a trademark registration application to the Korean Patent Office. Nexus CEO Jang Hyun guk stated that they chose to pre-release KRWx on the BNB Chain to establish a first-mover advantage and will continue to launch more fiat-backed stablecoins.

Nexus is preparing for the issuance of "KRWx" and other fiat stablecoins, and plans to establish a Hong Kong subsidiary, Nexus Stable HK, to promote the internationalization of stablecoins.

Other Potential Participants

Nexledger, launched by Samsung SDS, is one of the more mature enterprise-level private chain solutions in the South Korean market, equipped with the core features required for stablecoins. Samsung SDS is listed as a potential "infrastructure provider," and its enterprise clients may issue or host stablecoins through Nexledger.

LG CNS, as the official contractor for the South Korean central bank's wholesale CBDC/tokenized deposit system, has mastered the core capabilities of on-chain asset management such as minting, clearing, auditing, and custody. With the advancement of the "Digital Asset Basic Act," LG CNS can occupy the role of infrastructure supplier through technological output.