The technology giant in South Korea, Naver, is considering acquiring Dunamu, the operator of the digital currency trading platform Upbit.

Naver and Dunamu are seeking to expand abroad through a stablecoin project, a deal that could reshape the landscape of the fintech sector in South Korea and support Naver's global ambitions.

Local reports indicate that Naver in South Korea is nearing a significant deal that will give the internet giant control over Upbit, the largest digital currency trading platform in the country, as Naver Financial - the company’s financial arm - is in advanced talks with platform operator Dunamu for a large stock exchange.

Under this plan, Naver will issue new shares to acquire stakes from existing shareholders in Dunamu, as reported by Chosun Daily on Thursday, stating that both parties are now finalizing the ratio of unlisted stock exchange.

Practically, this exchange process allows the two companies to swap stocks instead of cash, creating a governance structure that follows the parent and subsidiary company model. Ultimately, this move is one of Naver's means to solidify its position in the digital financial and crypto markets.

International expansion plans add a global dimension to the merger talks.

The payment volumes processed by Naver Financial amount to 80 trillion Korean won (58 billion dollars) annually. In contrast, a merger of this magnitude with Upbit, which is owned by Dunamu and ranks first in Korea and fourth globally, could create one of the strongest alliances to date between the technology and digital currency sectors in South Korea.

The two companies are also collaborating to launch an initiative linking the Korean won to a stablecoin, alongside their plans to use the deal as a springboard for international expansion, which is seen as a cornerstone for Naver to become a global player in fintech.

If this deal succeeds, it will reshape the landscape of the financial services sector in South Korea, where Naver Pay is currently one of the most widely used digital wallets in the country, competing with Kakao Pay and Toss, as well as traditional banks.

With Upbit's dominance in the crypto sector added, Naver could link payments, shopping, financing, and digital assets within a single technological system.

The battle for market share is escalating as Naver evaluates the deal.

The timing of the announcement of this deal seems interesting, coinciding with Korea Blockchain Week in Seoul, which could draw global attention to the rapidly growing crypto sector in the country.

At the same time, Bithumb - Upbit's competitor - earlier this week formed a partnership with World Liberty Financial, a crypto project associated with U.S. President Donald Trump.

For several years, Upbit has held a leading position in South Korea, maintaining over 80% of market share in some months since 2022. This dominance has drawn criticism from lawmakers who argue that Dunamu's control over the exchange market increases the risk of monopoly.

The market conditions have also changed recently, with Bithumb's market share in the local market rising to 46% on September 9, while Upbit's share reached 50.6%. As a result, the competition between the two platforms has intensified, adding more challenges for Naver in its quest to dominate Dunamu.

Looking ahead, if a deeper alliance between Naver and Dunamu is formed, it would represent one of the most significant mergers and acquisitions (M&A) in the fintech sector in South Korea.

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