Competition in the South Korean stablecoin market intensifies: multiple participants vie for the leading position

Before taking office, South Korean President Lee Jae-myung's campaign program explicitly proposed supporting the innovation of "local currency pegged stablecoin" to curb wealth outflow and enhance the competitiveness of the national digital financial ecosystem. After the Lee Jae-myung government came to power, the South Korean cryptocurrency industry became active immediately: eight major commercial banks are preparing to launch a joint project for the Korean won stablecoin, while traditional tech giants and Web3 companies are also making moves, striving to seize the initiative in the increasingly fierce regional and even global stablecoin competition.

At the same time, Congress is reviewing the "Digital Asset Basic Law" to provide a legal basis for private institutions to issue Korean won stablecoins, and financial regulatory authorities are also accelerating the establishment of operating norms in line with international standards. The second half of 2025 to the first half of 2026 may be a window period for the "explosive" growth of the Korean stablecoin market. This article systematically organizes and deeply analyzes the main participants, business models, and innovative trends in the Korean stablecoin market, focusing on several potential issuers.

Korea Bank Alliance

Due to the potential significant impact of the introduction of stablecoins on monetary policy and transaction settlement systems, the Bank of Korea has been cautious about whether stablecoins can serve as a substitute for legal tender, despite recognizing their innovative and facilitative role in the fintech sector. Bank of Korea Governor Lee Chang-yong stated in mid-June that the central bank is working with relevant agencies to develop a regulatory framework for stablecoins to ensure their stability and practicality while preventing their use for circumventing foreign exchange controls. Lee Chang-yong also 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 non-bank institutions. On June 24, Deputy Governor of the Bank of Korea, Yoo Sang-tae, stated at a press conference that the stablecoin denominated in Korean won should ideally be gradually introduced and should first be issued by commercially regulated banks. Once sufficient experience has been accumulated, it can then be gradually expanded to the non-bank sector 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 for the establishment of a joint venture to issue a Korean won stablecoin. The participating banks include KB Kookmin Bank, Shinhan Bank, Woori Bank, NongHyup Bank, Korea Enterprises 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 collaboration.

It is reported that the project team is considering two stablecoin issuance models: one is the trust model, where customer funds are first held in trust before issuing stablecoins; the other is the deposit token model, which links stablecoins to bank deposits. Currently, the banks involved are discussing the joint construction of infrastructure, and after improving the legal framework, a joint venture company could be established as early as the end of this year or early next year.

Among the eight banks mentioned above, KB Kookmin Bank, South Korea's largest retail bank, is the most active institution in engaging with 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 KB Kookmin Bank marks the first time a traditional Korean bank has officially entered the stablecoin sector on a large scale. The bank has a network of over 1,000 branches and a large individual customer base, making it a core leader of this joint venture both in terms of business scale and strategic positioning.

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

In addition, Woori Bank, NH 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 lending 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 clearing and offshore liquidity support for stablecoins.

Kakao Pay and Kaia

As a leading company in the payment sector in South Korea, Kakao Pay has been 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. Within just 20 months, the number of users exceeded 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 online and offline QR code payments, P2P transfers, and e-commerce settlement scenarios in South Korea has surpassed 60%. In terms of market share and active user scale, its position in South Korea is comparable to that of Alipay and WeChat Pay in China.

After Lee Jae-myung took office, the Kaia team quickly announced a partnership with super apps such as Kakao Pay and LINE NEXT to plan the launch of a Korean won stablecoin. Following the news, Kakao Pay's stock price soared nearly 30%. On June 22, Kakao Pay officially launched its business layout for the Korean won stablecoin, aiming to seize the early market advantage in the stablecoin sector. According to South Korean media reports, Kakao Pay submitted 18 trademark applications related to the "KRW" "K" "P" combinations, such as "KRWKP" and "KWRP", to the Korean Intellectual Property Office, covering areas such as 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 "Digital Asset Basic Law" in order 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 coordinate with the parent company's ecosystem, such as Kakao Bank and Kakao T, achieving deep integration of social, payment, and financial services, providing massive application scenarios for stablecoins.

Kaia is an EVM-compatible Layer 1 public chain formed by the merger of Klaytn and Finschia in August 2024, aiming to connect a total of 250 million users from Kakao Talk and LINE. In early June 2025, Sam Seo, the chairman of KaiaChain, clearly stated on social media that they will "fully promote the issuance of Korean Won stablecoin" on the Kaia mainnet, and said, "the summer of stablecoins has just begun." Earlier, Kaia had already 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 payments, once the policy is released, its stablecoin project can quickly go live, seizing market opportunities.

Danal

Danal, a well-established payment service provider in South Korea, is also a widely regarded participant. It launched PayCoin in 2019 and conducted early explorations in the virtual asset payment field. PayCoin once gained over 1 million registered users among various offline and online merchants, but due to unclear regulations at the time, the project ultimately suspended operations because of VASP registration obstacles.

As the South Korean government accelerates the legislative process of the "Basic Law on Digital Assets" and clearly supports the policy direction of pegged stablecoins, Danal has once again launched its digital currency business. According to South Korean media reports, Danal submitted multiple patent applications to the Korean Patent Office in June 2025 for "POS terminals that support 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 process of stablecoins due to its years of accumulated POS terminal network and payment clearing system. On one hand, its POS terminals can directly recognize and settle on-chain tokens, simplifying the user payment path; on the other hand, its backend system for merchant settlement can seamlessly connect with off-chain reserve management, providing prerequisites for compliance audits and reserve proof.

Nexus

On the day that the blockchain startup Nexus officially entered the stablecoin track with Kakao Pay, it also expressed the desire to become the first issuer of a Korean won stablecoin.

According to Korean media reports, Nexus has issued a Korean won stablecoin named KRWx on the BNB Chain and has submitted a trademark registration application to the Korean Patent Office. In addition, they have also submitted trademark applications for fiat stablecoins such as the US dollar, Japanese yen, and Euro.

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 the opportunities they present in the global digital economy.

In addition, South Korean media 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, advancing the internationalization layout of stablecoins.

Other Potential Participants

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

According to South Korean media reports, in the context of South Korea's upcoming policy to open up its local currency-linked stablecoin, Samsung SDS has been listed as one of the potential "infrastructure providers," with its corporate clients possibly issuing or hosting stablecoins through Nexledger.

Similarly, due to the sufficiently完善 underlying infrastructure, LG CNS, the IT solutions and system integration subsidiary of LG, is also seen as a potential participant and beneficiary. It was selected as the official contractor for the wholesale CBDC/tokenized deposit system of the Bank of Korea, responsible for the construction of the open blockchain platform, with a project budget of approximately 9.68 billion.