The South Korean stablecoin market sees a turning point: multiple parties compete for the initiative

Recently, the South Korean stablecoin market has shown a thriving trend. Under the government's policy direction supporting the issuance of stablecoins pegged to the local currency, bank alliances, tech giants, and Web3 companies are all making moves to seize the initiative in an increasingly fierce regional and even global stablecoin competition.

The "Basic Law on Digital Assets" currently under review by the National Assembly will provide a legal basis for private institutions to issue Korean won stablecoins, and financial regulatory authorities are also accelerating the establishment of operational standards in line with international practices. This suggests that the second half of 2025 to the first half of 2026 is likely to become a window period for explosive growth in the Korean stablecoin market.

Bank Alliance Actively Layout

Although the Bank of Korea takes a cautious attitude towards stablecoins, it recognizes their innovative and promoting role in the financial technology sector. Deputy Governor Yoo Sang-da stated that the stablecoin denominated in Korean won should be issued first by strictly regulated commercial banks to prevent impacts on monetary policy and the payment system.

In this context, 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, along with the Korea Financial Telecommunications and Clearing Institute, will participate in coordination and cooperation.

The project team is considering two stablecoin issuance models: one is the trust model, where customer funds are first held in trust before issuing the stablecoin; the other is the deposit token model, which ties the stablecoin to bank deposits. The aforementioned banks are currently discussing the joint construction of infrastructure, and it is expected that a joint venture may be established as early as the end of this year or the beginning of next year.

As the largest retail bank in South Korea, Kookmin Bank has been the most proactive in the layout of stablecoins. The bank has taken the lead in initiating the process of acquiring trademarks related to stablecoins, with the trademarks it intends to apply for including the combination of "KB" and the Korean won symbol "KRW".

Shinhan Bank collaborated with Hedera as early as 2021 to pilot a Korean won stablecoin and participated in the stablecoin-based Korea-Japan overseas remittance demonstration project "Project Pax" this April.

Tech giants are entering the game

As a leading company in the payment sector of South Korea, Kakao Pay is undoubtedly the most proactive among large firms in the layout of the KRW stablecoin. The company has submitted 18 trademark applications for "KRW" "K" "P" combinations 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 Asset Basic Law" to seek to become one of the first compliant stablecoin issuers after the regulations are implemented. The company will also leverage its traditional business advantages to closely coordinate with its parent company's ecosystem, including Kakao Bank and Kakao T, to achieve deep integration of social, payment, and financial services, providing massive application scenarios for stablecoins.

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 from Kakao Talk and LINE. Sam Seo, the 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 bring USD₮ into the Kaia ecosystem, laying the technical and ecological foundation for the subsequent KRW stablecoin.

The longstanding payment service provider Danal has also restarted its digital currency business. The company has submitted multiple patent applications to the Korean Patent Office for "POS terminals supporting virtual asset payments and their operation methods," providing underlying technical support for potential stablecoin payment scenarios in the future.

Web3 Enterprises Seize the Opportunity

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. In addition, they have also submitted trademark applications for fiat stablecoins such as the US dollar, Japanese yen, and euro.

Nexus CEO Jang Hyun guk stated that they chose to pre-release KRWx on the BNB Chain to establish a first-mover advantage. The company plans to continue launching more fiat-backed stablecoins and establish a Hong Kong subsidiary, Nexus Stable HK, to promote the internationalization of stablecoins.

Other Potential Participants

Nexledger, launched by Samsung SDS under the Samsung Group, is one of the most mature enterprise-grade private chain solutions in the South Korean market. Industry insiders believe that Nexledger has already equipped itself with the core features required for a stablecoin, and once internal or partner issuance plans are finalized, the technical preparations are almost ready.

LG CNS, a subsidiary of LG, serves as the official contractor for the wholesale CBDC/tokenized deposit system of the Bank of Korea, possessing core capabilities in minting, clearing, auditing, and custody of on-chain asset management. With the advancement of the "Digital Asset Basic Law", LG CNS can occupy the role of infrastructure supplier through technology output.

The competition landscape of the South Korean stablecoin market is rapidly taking shape. With the improvement of laws and regulations and the active布局 of various participants, the KRW stablecoin is expected to usher in rapid development in the near future, bringing new vitality to South Korea's digital financial ecosystem.