Eight major South Korean banks have announced the formation of a consortium to launch a won-pegged stablecoin. This initiative marks the country's first step towards a comprehensive integration of digital currencies into traditional finance.
Formation of the Stablecoin Consortium
The consortium includes leading banks such as KB Kookmin, Shinhan, Woori, Nonghyup, Industrial Bank of Korea, Suhyup, Citibank Korea, and SC First Bank. The initiative is supported by the Open Blockchain and DID Association, and overseen by the Financial Supervisory Service.
Two Proposed Models for the Stablecoin
The banks have proposed two models for issuing the stablecoin: a trust-based model and a deposit-linked model. In the trust model, coins would be issued after customer funds are separately entrusted, ensuring additional safeguards. The deposit-linked model would issue coins backed 1:1 by traditional bank deposits.
Regulatory and Political Support
The announcement coincides with South Korea's ongoing efforts to shape its digital asset regulations. The proposed Digital Asset Act aims to create a clear authorization framework for stablecoin issuance. President Lee Jae-myung has also expressed support for the idea of a won-backed stablecoin, emphasizing the need to modernize trade.
The launch of a won-backed stablecoin represents a crucial step for South Korea's digital economy and the future of financial transactions. The official launch is anticipated by the end of 2025 or early 2026, depending on regulatory progress and technical development.
