Competition in the Korean Won Stablecoin Market Intensifies: Longer Forces Positioning to Seize Opportunities

South Korean President Lee Jae-myung proposed an innovative measure to support "local currency pegged stablecoins" before taking office, aiming to enhance the competitiveness of the country's digital financial ecosystem. With the new government in place, South Korea's cryptocurrency industry has quickly taken action: several commercial banks are preparing a joint project for a won stablecoin, while traditional tech giants and Web3 companies are also making moves, striving to seize the initiative in the increasingly fierce regional and even global stablecoin competition.

At the same time, Congress is reviewing relevant bills to provide a legal basis for private institutions to issue Korean won stablecoins, and regulatory authorities are also accelerating the establishment of operational regulations. It is expected that the second half of 2025 to the first half of 2026 may be a critical period for explosive growth in South Korea's stablecoin market.

Korean Bank Alliance

Although the Bank of Korea maintains a cautious stance towards stablecoins, it still believes that it is more appropriate for strictly regulated commercial banks to issue them first. According to reports, eight major banks in South Korea plan to establish a joint venture to issue a won stablecoin, with participating banks including KB Kookmin Bank, Shinhan Bank, and Woori Bank. The project team is considering two issuance schemes: a trust model and a deposit token model, with the joint venture potentially being established as early as the end of this year or early next year.

As the largest retail bank in South Korea, the National Bank has taken the lead in initiating the trademark application process related to stablecoins. Shinhan Bank had already partnered with Hedera in 2021 to pilot a Korean won stablecoin, and in April of this year, it participated in a demonstration experiment for cross-border remittances between Korea and Japan based on stablecoins. Other participating banks, such as Woori Bank and Nonghyup Bank, also have extensive experience in CBDC testing and interbank payment systems.

Kakao Pay and Kaia

Kakao Pay, as a leading company in the South Korean payment sector, is actively engaged in the layout of the KRW stablecoin. The company has submitted 18 relevant trademark applications to the Korean Intellectual Property Office, covering areas such as virtual asset financial transactions and electronic transfers. Kakao Pay plans to align with the legislative process of the Digital Asset Basic Act and aims to become one of the first compliant stablecoin issuers.

Kaia is an EVM-compatible public chain formed by the merger of Klaytn and Finschia, aimed at connecting a total of 250 million users of Kakao Talk and LINE. The chairman of Kaia stated that they will "fully promote the issuance of the Korean won stablecoin" on the mainnet. Kaia has launched local USDT, laying the foundation for the subsequent KRW stablecoin. Kaia collaborates with super applications like Kakao Pay, striving to achieve integrated cross-chain and cross-platform circulation of "on-chain + social + payment."

Danal

The established payment service provider Danal launched PayCoin in 2019 to explore virtual asset payments. With the improvement of the policy environment, Danal has restarted its digital currency business and has submitted multiple patent applications related to POS terminals that support virtual asset payments to the Korean Patent Office. Danal has an advantage in the stablecoin business process due to its years of accumulated POS terminal network and payment clearing system.

Nexus

The blockchain startup Nexus has issued a Korean won stablecoin named KRWx on the BNB Chain and has submitted a related trademark registration application. The CEO of Nexus stated that they chose to launch KRWx on the BNB Chain in order to establish a first-mover advantage. Nexus also plans to set up a subsidiary in Hong Kong to promote the internationalization of the stablecoin.

Other Potential Participants

Samsung SDS's Nexledger and LG CNS's CBDC solutions are seen as potential providers of stablecoin infrastructure. These two IT giants have accumulated rich experience in enterprise-level blockchain solutions and digital currency management, and are expected to play an important role in the Korean won stablecoin ecosystem.

With the advancement of the "Basic Law on Digital Assets" and the South Korean government's support for fiat-pegged stablecoins, the competition landscape of the Korean won stablecoin market is rapidly taking shape. Bank alliances, tech giants, and Web3 startups are showcasing their strengths, and it remains to be seen who will stand out in this competition.