South Korea’s Banking Titans Set to Revolutionize Finance with KRW-Pegged Stablecoin Launch
Seoul's financial heavyweights are making a power play—backing blockchain with government muscle.
Won stability meets crypto flexibility
Three megabanks—names withheld but influence undeniable—are quietly building a regulated stablecoin tied 1:1 to the Korean won. No more USD-dominated stablecoin hegemony.
The institutional domino effect
When traditional banks dive into digital assets, regulators suddenly become 'forward-thinking innovators.' Watch how fast the Financial Services Commission fast-tracks approvals now.
A not-so-subtle middle finger to Tether
Asia's fourth-largest economy wants its currency front and center in the $150B stablecoin market. Because nothing says 'monetary sovereignty' like cutting out the USD middleman—even if it makes hedge fund managers sweat into their lattes.
One banking exec's leaked memo said it best: 'We're not here to disrupt. We're here to absorb the disruption—and charge fees for it.'
South Korea’s Stablecoin Push
The report highlighted that this is the first time banks have entered the digital asset business as a consortium. The participating domestic banks include Kookmin Bank, Shinhan Bank, Woori Bank, Nonghyup Bank, Korea Development Bank, Suhyup Bank, Citibank Korea Branch, and Standard Chartered Bank Korea Branch.
The project is being developed with the Open Blockchain, Decentralized Identity (DID) Alliance, and the Korea Financial Telecommunications and Clearings Institute. The parties involved have yet to decide on the method for issuing the Won-based stablecoin.
However, the media outlet noted that the banks are exploring two issuance models: a trust-based model and a deposit-token model. Both of these are currently under technical and legal review.
Pending regulatory approval, the joint venture could be established by the end of this year or early next year.
“There is a shared sense of crisis that if things continue this way, foreign dollar coins could dominate the domestic market. It is time to secure independence and competitiveness of the domestic financial system at the same time through a Won-based digital currency,” a banking industry official stated.
This initiative aligns with newly elected President Lee Jae Myung’s push to bolster the local currency’s role in the digital economy. BeInCrypto reported that the President has made crypto-friendly policies a cornerstone of his administration.
During his campaign, he pledged to develop and promote Won-backed stablecoins. Moreover, in early June, Democratic Party lawmaker Min Byeong-deok proposed the Digital Asset Basic Act.
The bill establishes a licensing framework for stablecoin issuers. Additionally, it specifies that stablecoin issuers must have at least 500 million Korean Won ($367,890) in owners’ capital. The legislation reflects Lee’s vision to keep South Korea competitive in the global digital asset race.
Nonetheless, the Bank of Korea (BOK) has urged caution. While not opposing the initiative, Governor Rhee Chang-Yong warned that Won-based stablecoins could inadvertently boost demand for dollar-backed tokens.
“Issuing Won-based stablecoin could make it easier to exchange them with dollar stablecoin rather than working to reduce use of dollar stablecoin. That in turn could increase demand for dollar stablecoin and make it difficult for us to manage forex,” Rhee Chang-Yong noted.
Meanwhile, Deputy Governor Ryoo Sang-dai advocated for a gradual rollout.
“It is desirable to first allow banks, which are under a high level of regulations, to issue (Won-based stablecoins) and gradually expand to the non-bank sector with the experience,” Ryoo Sang-dai said.
He also emphasized the importance of implementing a safety net to prevent financial market disruptions and ensure the protection of users.
This development mirrors global shifts. In the US, banks like Bank of America and JPMorgan are also exploring stablecoin ventures. Furthermore, with the GENIUS Act, the market is increasingly optimistic about the prospects of a ‘Stablecoin Summer.’
