Eight major South Korean banks have joined forces to launch a won-pegged stablecoin, marking the country’s boldest step yet into the digital asset space.
Legislation is also starting to catch up. On June 10, Korea’s ruling Democratic Party introduced the Digital Asset Basic Act, which would legalize stablecoin issuance for companies with minimum equity capital of around $368,000.
A Consortium That Could Challenge Dollar Dominance
The banks, KB Kookmin, Shinhan, Woori, Nonghyup, Corporate Bank, Suhyup, Citi Korea, and SC First Bank, are working alongside the Open Blockchain and Decentralized Identity (DID) Association and the Financial Settlement Institute.
Backed by the Korea Financial Telecommunications and Clearings Institute, the consortium-led stablecoin venture will introduce two models: one trust-based, and the other deposit-linked, both pegged 1:1 to the Korean won.
The goal is to combat the overwhelming dominance of dollar-pegged stablecoins, which currently account for 99% of the global stablecoin market with a capitalization exceeding $239 billion, according to RWA.xyz.
The expected rollout between late 2025 and early 2026 would place Korea among the first developed nations with a bank-backed stablecoin ecosystem.
Central Bank Wary, But Not Opposed
The move has not gone unnoticed by the Bank of Korea (BOK), whose leadership has taken a cautious stance. Governor Rhee Chang-yong voiced concerns that the stablecoin could ease currency swaps into USD, potentially undermining the central bank’s ability to manage the won.
Deputy Governor Ryoo Sangdai echoed this, stating that any stablecoin launch should be gradual and initially bank-led, citing systemic risks.
“It would be desirable to initially allow stablecoin issuance primarily through banks, which are subject to higher levels of financial regulation, and gradually expand it to the non-banking sector,” Ryoo told reporters.
The central bank is also continuing its exploration of a CBDC as a countermeasure, with a pilot test wrapping up this June and further pilots under discussion.
Global Stablecoin Race Heats Up
Under Donald Trump, the GENIUS Act, which passed the US Senate on June 17 by a 68-30 vote, has ignited momentum for stablecoin regulation in the world’s largest economy.
The bill mandates full backing of stablecoins by reserves, offers redemption guarantees, and introduces tiered oversight between state and federal agencies.
Its passage marks the first major legislative milestone for stablecoins in the US, offering a potential legal framework for institutions like JP Morgan, Bank of America, and Wells Fargo, all of whom have expressed interest in launching US dollar stablecoins.
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