In South Korea, interest is growing in won-linked stablecoins due to an initiative by the country's largest commercial banks.
Participation of South Korean Banks
According to local media reports, eight of South Korea's leading banks, including KB Kookmin, Shinhan, Woori, and others, are working on a joint initiative to create a stablecoin backed by the Korean won. The project aims to reduce the dominance of dollar-based digital assets.
Regulators' Response to Foreign Stablecoins
The stablecoin initiative coincides with the Financial Services Commission's release of a new roadmap outlining plans for stablecoins and crypto ETFs. This was prompted by concerns in the banking sector regarding competition from foreign-issued currencies in the domestic market.
Challenges and Perspectives of the Stablecoin
The banks are reviewing two approaches to stablecoin issuance, including trust-based structures and deposit-linked models, both aimed at ensuring full 1:1 backing with the Korean won. The launch is expected by late 2025 or early 2026, pending regulatory approval.
The initiative to create a stablecoin linked to the Korean won highlights South Korean banks' efforts to maintain competitiveness amid the growth of foreign digital currencies.
