Overview

Eight of South Korea’s leading commercial banks - KB Kookmin, Shinhan, Woori, Nonghyup, Industrial Bank of Korea, Suhyup, Citibank Korea, and SC First Bank - have come together to launch a consortium aimed at developing a stablecoin backed by the South Korean won. This marks a major step toward domestic digital currency innovation by private institutions.

Dual Stablecoin Models

The consortium plans to explore two distinct issuance models:

• Trust-Based Model: Stablecoins will be backed by segregated customer funds held in trust accounts.

• Deposit-Linked Model: Stablecoins will maintain a 1:1 peg with customer deposits held at issuing banks.

These structures aim to ensure transparency, enhance user trust, and comply with anticipated regulations.

Strategic Urgency

South Korea’s banking sector is accelerating this initiative in response to the increasing presence of foreign stablecoins like USDT and USDC in local markets. Industry leaders stress the importance of safeguarding domestic monetary sovereignty and maintaining competitiveness through a homegrown, won-denominated digital asset.

Regulatory Alignment

The project is expected to align with the upcoming Digital Asset Basic Act, which will regulate stablecoin issuers. Key provisions under consideration include licensing requirements, reserve maintenance, and minimum capital thresholds. These rules are designed to ensure financial stability and secure user funds.

Bank of Korea officials have suggested a cautious, phased introduction — beginning with regulated financial institutions and potentially expanding to fintech and non-bank issuers over time.

Government Backing

This stablecoin initiative is consistent with the South Korean government’s digital asset roadmap, including efforts to modernize the financial system and mitigate capital outflow. In the first quarter of 2025 alone, more than $19 billion in stablecoins exited South Korea — reinforcing the need for a viable domestic alternative.

Tech Industry Participation

Major South Korean tech firms are also entering the stablecoin space. KakaoPay and Naver are reportedly exploring their own KRW-backed tokens, with KakaoPay filing multiple trademarks for stablecoin-related products. This signals growing momentum from both the banking and technology sectors.

Potential Use Cases

A won-pegged stablecoin could serve a variety of practical purposes:

• Domestic and international payments

• Corporate and institutional remittances

• Integration into digital banking platforms

• Decentralized finance and smart contract ecosystems

The consortium is working on building interoperable infrastructure with a goal of launching within the next year.

Why This Matters

• Monetary Sovereignty: A domestic stablecoin could help reduce reliance on foreign digital assets.

• Regulatory Clarity: South Korea is emerging as a leader in balancing innovation with oversight.

• Market Growth: Participation by major banks and tech companies reflects high potential for adoption.

• Digital Leadership: This initiative positions South Korea as a trailblazer in the global stablecoin race.

Conclusion

South Korea’s stablecoin consortium represents a significant milestone in the country’s digital currency evolution. With unified support from top banks, regulatory alignment in progress, and private-sector innovation accelerating, the launch of a won-pegged stablecoin is set to transform the national financial landscape.