Competition in the South Korean stablecoin market heats up: longer forces are eager to try

President Lee Jae-myung clearly stated in his campaign program before taking office that he supports the innovation of "local currency-linked stablecoin" to curb capital outflow and enhance the competitiveness of the country's digital financial ecosystem. After Lee Jae-myung's government took office, South Korea's cryptocurrency industry immediately became active: not only are several major commercial banks preparing to launch a joint project for the Korean won stablecoin, but traditional tech giants and Web3 companies are also making moves to gain an advantage in the increasingly fierce regional and even global stablecoin competition.

At the same time, Congress is reviewing the "Basic Law on Digital Assets" to provide a legal basis for private institutions to issue the Korean won stablecoin, and financial regulatory authorities are also accelerating the establishment of operational norms that align with international standards. It is foreseeable that the second half of 2025 to the first half of 2026 may be a critical period for explosive growth in the Korean stablecoin market. This article systematically sorts out and deeply analyzes the main participants, business models, and innovation trends in the Korean stablecoin market, focusing on several potential issuers.

Korea Bank Alliance

The introduction of stablecoins may have significant effects on monetary policy and transaction settlement systems. Therefore, although the Bank of Korea has recognized the innovative and facilitative role of stablecoins in the fintech sector, it has been concerned about whether they can serve as a substitute for legal tender. Bank of Korea Governor Lee Chang-yong stated in mid-June that the bank is working with relevant institutions to develop a regulatory framework for stablecoins to ensure their stability and practicality, while also preventing them from being used to circumvent foreign exchange controls. Lee Chang-yong subsequently expressed a cautious attitude towards the Korean won stablecoin.

Under this cautious policy direction, the most competitive participants in the Korean won stablecoin sector are undoubtedly non-bank institutions. According to reports, on June 24, the Deputy Governor of the Bank of Korea, Yoo Sang-da, stated at a press conference that stablecoins denominated in Korean won should be gradually introduced, and they should first be issued by strictly regulated commercial banks. After accumulating sufficient experience, the expansion to the non-bank sector should be gradually carried out to prevent impacts on monetary policy and the payment system.

On June 25, South Korean media reported that 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 Enterprise Bank, Suhyup Bank, Citibank Korea, and Standard Chartered Bank Korea. In addition, the Open Blockchain and Decentralized Identifier Association, as well as the Korea Financial Telecommunications and Clearing Institute, will participate in coordination and cooperation.

According to reports, the project team is considering two issuance models for stablecoins: one is the trust model, where customer funds are separately entrusted before issuing stablecoins; the other is the deposit token model, which links stablecoins to bank deposits. Currently, the banks mentioned are discussing the joint construction of infrastructure, and after perfecting the legal system, a joint venture could be established as early as the end of this year or the beginning of next year.

According to disclosed information, among the eight banks mentioned above, the largest retail bank in South Korea, Kookmin Bank, is the most actively involved in stablecoin initiatives. It has taken the lead in initiating the process to acquire trademarks related to stablecoins, with proposed trademarks including combinations of "KB" and the Korean won symbol "KRW," such as KBKRW, KRWKB, KBST, and KRWST. This move by Kookmin Bank marks the first time a traditional South Korean bank has officially entered the stablecoin field on a large scale. The bank has a network of over 1,000 branches and a vast individual customer base, making it a core leading party in this joint venture both in terms of business scale and layout.

Shinhan Bank is a leader in the South Korean retail market alongside KB Kookmin Bank, and in recent years has made multiple attempts to connect with virtual assets. It first partnered with Hedera in 2021 to pilot a Korean won stablecoin, aiming to determine whether it was possible to issue and distribute stablecoins for financial use cases at lower costs and with shorter completion times than the existing system, while also making transactions traceable. In 2022, Shinhan Bank also provided virtual accounts that can trade virtual assets to certain enterprises. In April of this year, the bank participated in a demonstration experiment for remittances between Korea and Japan based on stablecoins, aiming to leverage digital assets to build the next generation of global remittance and payment systems.

In addition, Woori Bank, NongHyup Bank, and others have rich experience in international payments and have played important roles in CBDC testing, interbank RTGS, and blockchain projects; corporate banking has been deeply involved in SME credit and trade financing for many years, providing cost advantages for enterprise-level application scenarios; Standard Chartered and Citibank's Korean branches, backed by their parent banks' international networks, may provide overseas settlement and offshore liquidity support for stablecoins.

Kakao Pay and Kaia

As a leading company in the payment sector in South Korea, Kakao Pay is arguably the most proactive among large firms in the layout of the Korean won stablecoin.

Kakao Pay was established in 2014, relying on the Kakao Talk instant messaging application. In just 20 months, the number of users surpassed 10 million, and in 2017 it received a $200 million strategic investment from Alibaba's Ant Financial, solidifying its leading position in the South Korean mobile payment market. By mid-2025, Kakao Pay's penetration rate in South Korea for online and offline QR code payments, P2P transfers, and e-commerce settlement scenarios has exceeded 60%. In terms of market share and active user scale, its position in South Korea is comparable to China's Alipay and WeChat Pay.

After Lee Jae-myung took office, the Kaia team quickly announced a collaboration with super apps like Kakao Pay and LINE NEXT to plan the launch of a Korean won stablecoin. Following the news, Kakao Pay's stock price surged nearly 30%. On June 22, Kakao Pay officially launched its business layout for the Korean won stablecoin, aiming to seize the first mover advantage in the stablecoin market. According to South Korean media reports, Kakao Pay submitted 18 trademark applications for the stablecoin combinations "KRW", "K", and "P" to the Korean Intellectual Property Office, such as "KRWKP" and "KWRP", covering areas of virtual asset financial transactions, electronic transfers, and intermediary services, indicating its high expectations for the stablecoin business.

Kakao Pay will actively cooperate with the legislative process of the "Basic Law on Digital Assets" to seek to become one of the first compliant stablecoin issuers after the regulations are implemented. Kakao Pay will also be able to leverage its traditional business advantages to closely collaborate with its parent company's ecosystem, including Kakao Bank and Kakao T, achieving deep integration of social, payment, and financial services, providing massive application scenarios for stablecoin.

Kaia is an EVM-compatible Layer 1 public chain formed by the merger of Klaytn and Finschia in August 2024, aimed at connecting a total of 250 million users from Kakao Talk and LINE. In early June 2025, KaiaChain Chairman Sam Seo clearly stated on social media that they will "fully promote the issuance of the Korean won stablecoin" on the Kaia mainnet, and said, "the summer of stablecoins has just begun." Earlier, Kaia launched local USDT and collaborated with Tether to bring USD₮ into the Kaia ecosystem, laying the technical and ecological foundation for the subsequent KRW stablecoin.

Kaia is collaborating with super applications such as Kakao Pay and LINE NEXT to plan a stablecoin project, aiming to achieve integrated cross-chain and cross-platform circulation of "on-chain + social + payment." With the ecological synergy of the underlying public chain and terminal payment, once policies are released, its stablecoin project can be quickly launched to seize market opportunities.

Danal

The long-established South Korean payment service provider Danal is also a widely regarded participant. In 2019, it launched PayCoin, conducting early explorations in the virtual asset payment field. PayCoin once garnered over 1 million registered users across multiple offline and online merchants, but due to unclear regulations at the time, the project ultimately suspended operations due to VASP registration obstacles.

As the South Korean government accelerates the legislative process of the "Digital Asset Basic Law" and clearly supports the policy direction of local currency-pegged stablecoins, Danal has once again launched its digital currency business. According to reports, Danal has submitted multiple patent applications to the Korean Patent Office in June 2025 for "POS terminals supporting virtual asset payments and their operation methods," aiming to provide underlying technical support for potential stablecoin payment scenarios in the future.

On a technical level, Danal has a natural advantage in the business processes of stablecoins due to its years of accumulated POS terminal network and payment clearing system. On one hand, its POS terminals can directly identify and settle on-chain tokens, simplifying the user payment path; on the other hand, its backend system for merchant settlement can seamlessly connect to off-chain reserve management, providing prerequisites for compliance auditing and reserve proof.

Nexus

The blockchain startup Nexus expressed its desire to become the first issuer of a Korean won stablecoin on the same day that Kakao Pay officially entered the stablecoin arena.

According to reports, Nexus has issued a stablecoin named KRWx in the BNB Chain and has submitted a trademark registration application to the Korean Patent Office. In addition, they have also simultaneously submitted trademark applications for fiat stablecoins such as USD, JPY, and EUR.

Nexus CEO Jang Hyun guk stated that they chose to pre-release KRWx on the BNB Chain in order to establish a first-mover advantage and declared that they will continue to launch more fiat-backed stablecoins, emphasizing that "the reason for the existence of stablecoins lies in their practicality" and their opportunities in the global digital economy system.

In addition, it has been reported that Nexuss is preparing for the issuance of "KRWx" and other fiat stablecoins, and plans to establish a Hong Kong subsidiary, Nexus Stable HK, to leverage its advantages in Hong Kong's laws and trading market to promote the internationalization of stablecoins.

Other Potential Participants

Nexledger, launched by Samsung SDS, the IT solutions and system integration subsidiary of Samsung Group, is one of the most mature enterprise-level private blockchain solutions in the Korean market, supporting longer signatures, cross-chain interoperability, and high-performance throughput. Industry insiders believe that Nexledger already possesses the three core features required for stablecoin: "traceability + high reliability + auditability." Once internal or partner issuance plans are finalized, the technical preparations are almost ready.

According to reports, with the upcoming policy in South Korea for the issuance of local currency-backed stablecoins, Samsung SDS has been listed as one of the potential "infrastructure providers," and its corporate clients may issue or host stablecoins through Nexledger.

Similarly, LG CNS, the IT solutions and system integration subsidiary under LG, is also seen as a potential participant and beneficiary due to its sufficiently developed underlying infrastructure. It has been selected as the official contractor for the Bank of Korea's wholesale CBDC/tokenized deposit system, undertaking the construction work for an open blockchain platform, with a project budget of approximately 9.68 billion won, covering the period from the third quarter of 2024 to March 2025.

As a core provider of wholesale CBDC and digital currency solutions, LG CNS has mastered the core aspects of on-chain asset management such as minting, clearing, auditing, and custody.