25 Jun
25Jun

In a landmark move for South Korea’s financial and digital asset sectors, eight major domestic banks are preparing to launch a joint stablecoin project pegged to the Korean Won (KRW), according to a recent report from Economic Review. The initiative marks the first time a consortium of South Korean banks has entered the digital asset market collectively.

Reducing Dollar Dependence, Advancing Digital Sovereignty

The new venture is aimed at reducing reliance on U.S. dollar-backed stablecoins—such as USDT and USDC—which currently dominate global crypto trading. By issuing a Won-based stablecoin, the consortium seeks to reinforce South Korea’s monetary independence and strengthen its leadership in the evolving digital economy.

The banks participating in the initiative include:

  • Kookmin Bank
  • Shinhan Bank
  • Woori Bank
  • Nonghyup Bank
  • Korea Development Bank
  • Suhyup Bank
  • Citibank Korea Branch
  • Standard Chartered Bank Korea Branch

The project is being developed in partnership with the Open Blockchain and Decentralized Identity (DID) Alliance and the Korea Financial Telecommunications and Clearings Institute.

Two Stablecoin Models Under Review

Although the exact issuance model hasn’t been finalized, two structures are currently under technical and legal evaluation:

  1. Trust-Based Model – where a third-party trust manages the underlying reserves.
  2. Deposit-Token Model – where banks issue stablecoins backed by customer deposits.

Pending regulatory approval, the banks aim to formally launch the stablecoin consortium by late 2025 or early 2026.

“There is a shared sense of urgency,” said a senior industry official. “If the current dependence on dollar-pegged coins continues, we risk losing control of the domestic digital finance ecosystem. This is a pivotal step toward financial sovereignty.”

Support from the Government—and Caution from the Central Bank

This initiative aligns closely with President Lee Jae Myung’s crypto-forward agenda. During his campaign, Lee committed to promoting Won-backed digital assets as part of his broader strategy to modernize South Korea’s financial system.

In June, Democratic Party lawmaker Min Byeong-deok introduced the Digital Asset Basic Act, a proposed regulatory framework for stablecoin issuers. Key provisions of the bill include:

  • A licensing requirement for stablecoin issuers
  • A minimum of ₩500 million ($367,890) in owners’ capital
  • Stronger consumer protections and compliance measures

However, the Bank of Korea (BOK) has urged a cautious approach. Governor Rhee Chang-Yong warned that if not properly managed, a Won-based stablecoin could inadvertently increase the demand for U.S. dollar stablecoins, complicating South Korea’s foreign exchange management.

Deputy Governor Ryoo Sang-dai recommended a phased rollout, starting with regulated banks before opening the door to non-bank entities. He stressed the need for a “safety net” to prevent market disruption and protect users.

South Korea Joins Global Stablecoin Race

South Korea’s entry into the national stablecoin arena mirrors developments elsewhere. U.S. financial giants like JPMorgan and Bank of America are also exploring stablecoin ventures, particularly in light of the proposed GENIUS Act, which would establish regulatory clarity for such digital currencies.

As global interest in stablecoins heats up, this Korean initiative signals a major step forward in the country’s digital finance evolution—one that could shift the balance of power away from the U.S. dollar and toward localized, sovereign digital assets.

June 2025, Cryptoniteuae

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