South Korea’s Major Banks Collaborate on Won-Backed Stablecoin Initiative

South Korea’s eight largest commercial banks, including KB Kookmin, Shinhan, and Woori, have formed a consortium to develop a Korean-won-pegged stablecoin. The initiative, backed by the Open Blockchain & DID Association and supervised by the Financial Supervisory Service (FSS), targets a pilot launch by early 2026.

The MOVE comes as foreign stablecoins like USDT and USDC dominate local trading volumes, reaching ₩56.95 trillion ($41.6 billion) in Q1 2025—a threefold increase since Q3 2024. "There is a shared sense of crisis that if things continue this way, foreign dollar coins could dominate the domestic market," a banking source noted.

The consortium proposes a dual-issuance model: one version backed by escrowed client funds via a trust structure, and another directly tied to on-balance-sheet deposits. This approach aims to rebuild public trust after the Terra-Luna collapse while testing scalability.