The eight largest banks in South Korea plan to issue stablecoins pegged to the Won.
The largest bank in the country has submitted an application for a stablecoin trademark.
The global stablecoin race is heating up, and South Korea wants to catch up with the United States, which is leading the Asia region.
According to a report from Economic Review, eight South Korean banks have collaborated to issue stablecoins linked to the local currency, the South Korean Won (KRW).
This group of banks includes KB Kookmin, Shinhan, Woori, NongHyup, Suhyup, Citibank Korea, Standard Chartered Korea, and Industrial Bank of Korea.
Among them, four banks belong to the five largest banks in the country, with data showing this is a serious project, not just a trial.
When banks build firewalls against USD stablecoins
Of course, banks do not act alone.
They are collaborating with the Open Blockchain Association and the Korea Financial Telecommunications and Payment Institute (KFTC).
KFTC is the backbone of the interbank payment system in South Korea.
This indicates that the project is considering expanding international payments and remittances through Won-pegged stablecoins, currently dominated by Circle with USDC and Tether with USDT.
Even a bank official shared:
"There is a general sense of crisis as foreign USD stablecoins may dominate the domestic market if the situation continues as it is."
This official continued:
"It is time to protect the independence and competitiveness of the domestic financial system through a digital currency based on the Won."
How is South Korea's cryptocurrency law different from the United States?
Meanwhile, the legal framework is still being finalized. The infrastructure of the banks is expected to be approved by the end of 2025 or early 2026.
However, the legal direction has gradually become clearer. South Korea's Basic Law on Digital Assets (DABA) is a significant milestone.
The banks are researching both trust-based issuance methods and deposit-backed token models, in accordance with DABA's regulations on stablecoin licensing.
Notably, the proposed stablecoin law was introduced under President Lee Jae-myung's administration – a supporter of cryptocurrencies. The main difference between DABA and the US GENIUS Act is the practical application of stablecoins.
DABA aims to protect financial sovereignty, support remittances, and reduce the dominance of the USD, while GENIUS focuses on maintaining the USD as the world's reserve currency.
Register trademarks first, issue later
The market has begun the battle for stablecoin trademark registration.
The largest bank, Kookmin, has registered 17 stablecoin trademarks to date. Another payment provider, Kakao Pay, has also just submitted a similar application, making Kookmin's move urgent.
Notably, KakaoBank, another partner, submitted 12 trademarks just a few days ago, with names like BKRW, KRWB, as revealed by Korea Times.
An official from KB Kookmin confirmed this strategy aimed at facilitating inter-bank cooperation, stating:
"We are registering trademarks to gain ownership advantage... The banking sector is forming a joint council, so we are preparing in advance to catch up."
Source: https://tintucbitcoin.com/ngan-hang-han-quoc-ra-stablecoin-won-2024/
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