Competition in the South Korean Stablecoin Market Heats Up: Bank Alliances, Tech Giants, and Web3 Companies are All Entering the Fray

South Korean President Lee Jae-myung clearly proposed the innovative measure of supporting "local currency pegged stablecoins" in his campaign platform, aiming to curb wealth outflow and enhance the competitiveness of the country's digital financial ecosystem. With the new government taking office, the South Korean cryptocurrency industry has begun to become active: eight major commercial banks have teamed up to prepare a Korean won stablecoin project, 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 "Fundamental Law on Digital Assets" to provide a legal basis for private institutions to issue Korean won stablecoins, and financial regulatory authorities are also accelerating the construction of operating norms in line with international standards. It is expected that the second half of 2025 to the first half of 2026 may become a "explosive" growth window for the Korean stablecoin market. This article systematically sorts and deeply analyzes the main participants, business models, and innovative trends in the Korean stablecoin market, with a focus on several potential issuers.

Korea Bank Alliance

The Bank of Korea is cautious about stablecoins, believing that they could have a significant impact on monetary policy and the transaction settlement system. Bank Governor Lee Chang-yong stated that they are 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 evade foreign exchange controls.

Under this policy direction, bank institutions have become the most competitive participants in the South Korean won stablecoin track. Yoo Sang-dae, the Senior Vice Governor of the Bank of Korea, suggested that the won-denominated stablecoins should first be gradually introduced by strictly regulated commercial banks, and after accumulating experience, expand to the non-bank sector.

According to reports, 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. The Open Blockchain and Decentralized Identifiers Association and the Korea Financial Telecommunications and Clearing Institute will participate in coordination and cooperation.

The project team is considering two stablecoin issuance models: one is the trust model, where client funds are first held in trust before issuing the stablecoin; the second is the deposit token model, which ties the stablecoin to bank deposits. A joint venture could potentially be established as early as the end of this year or the beginning of next year.

Among the participating banks, National Bank is the most active, having initiated the process of acquiring trademarks related to stablecoins. Shinhan Bank had already collaborated with Hedera on a pilot project for a Korean won stablecoin in 2021 and participated in the stablecoin-based Korea-Japan overseas remittance demonstration project "Project Pax" in April of this year. Other banks, such as Woori Bank and NH Nonghyup Bank, also play important roles in CBDC testing, interbank RTGS, and blockchain projects.

Kakao Pay and Kaia

Kakao Pay, as a leading company in the South Korean payment sector, has shown a proactive approach in the layout of the Korean won stablecoin. Established in 2014, the company has rapidly developed based on the Kakao Talk instant messaging application, and currently, its penetration rate in online and offline QR code payments, P2P transfers, and e-commerce settlement scenarios in South Korea has exceeded 60%.

On June 22, Kakao Pay officially launched its business layout for the KRW stablecoin, submitting 18 trademark applications for stablecoins combined with "KRW" "K" "P" to the Korean Intellectual Property Office. Kakao Pay will actively cooperate with the legislative process of the Digital Asset Basic Act, aiming to become one of the first compliant stablecoin issuers.

Kaia is an EVM-compatible Layer 1 public chain formed by the merger of Klaytn and Finschia, aimed at connecting a total of 250 million users from Kakao Talk and LINE. KaiaChain Chairman Sam Seo stated that they will "fully promote the issuance of the Korean won stablecoin" on the Kaia mainnet. Kaia has launched local USDT and partnered with Tether to bring USD₮ into its ecosystem.

Kaia is collaborating with super apps like 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 is expected to go live quickly.

Danal

The long-established Korean payment service provider Danal launched PayCoin in 2019, marking an early exploration in the field of virtual asset payments. As the South Korean government accelerates the legislative process of the "Digital Asset Basic Law", Danal has once again initiated its digital currency business. According to reports, Danal has submitted multiple patent applications to the Korean Patent Office for "POS terminals that support virtual asset payments and their operating methods."

Danal has technical advantages; its POS terminals can directly recognize and settle on-chain tokens, and the backend system can seamlessly connect to off-chain reserve management, providing conditions for compliance audits and reserve proofs.

Nexus

The blockchain startup 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. Nexus CEO Jang Hyun guk stated that they chose to pre-release KRWx on the BNB Chain to establish a first-mover advantage and plan to continue launching more fiat-pegged stablecoins.

Nexus is preparing for the issuance of "KRWx" and other fiat stablecoins, and plans to establish a Hong Kong subsidiary, Nexus Stable HK, to promote the internationalization of stablecoins.

Other Potential Participants

Nexledger, a private blockchain solution from Samsung SDS under the Samsung Group, is a mature enterprise-level solution in the Korean market, equipped with the core features required for stablecoins. Samsung SDS is seen as a potential "infrastructure provider," whose enterprise clients may issue or host stablecoins through Nexledger.

LG CNS, a subsidiary of LG, serves as the official contractor for the wholesale CBDC/tokenized deposit system of the Bank of Korea, mastering the core capabilities of on-chain asset management. With the advancement of the "Digital Asset Basic Law," LG CNS is expected to seize the role of infrastructure provider through technology export.