South Korea Stablecoin: Banks Launch Won-Pegged Crypto
- South Korea is advancing plans to introduce a stablecoin pegged to the Korean won, with major commercial banks at the forefront of the effort.
- Bank of Korea Deputy Governor Ryoo Sang-dai emphasized the need for stringent oversight, stating that beginning with highly regulated banks would foster trust and safeguard the financial system.
- Ryoo cautioned that a won-backed stablecoin could potentially disrupt South Korea's foreign exchange system by encouraging capital flight and weakening the central bank's ability to manage cross-border transactions.
South KoreaS financial landscape is poised for a meaningful shift as major banks prepare to launch a won-backed stablecoin, a move designed to modernize the financial system. This initiative, detailed in recent reports, seeks to diminish reliance on foreign cryptocurrencies while fostering a more robust digital economy. However, the introduction of this primary_keyword also sparks debate concerning potential implications for foreign exchange controls and the possibility of secondary_keyword disruptions. Bank of Korea officials are strategizing stringent oversight, and exploring trust-based and deposit-linked issuance models. News Directory 3 offers this crucial insight. Eight leading south korean institutions are collaborating, highlighting the ambition behind this digital currency project. Anticipate potential effects on cross-border transactions and capital flows. Discover what’s next …
South Korea Eyes Won-Backed Stablecoin Amid Global Digital Currency Race
Updated June 26, 2025
South Korea is advancing plans to introduce a stablecoin pegged to the Korean won, with major commercial banks at the forefront of the effort. This move aims to modernize the nation’s financial infrastructure and reduce its dependence on foreign-issued cryptocurrencies. However, the initiative also raises concerns about potential disruptions to existing foreign exchange controls.
Bank of Korea Deputy Governor Ryoo Sang-dai emphasized the need for stringent oversight, stating that beginning with highly regulated banks would foster trust and safeguard the financial system. He added that if the system proves successful, the scope of issuance could expand to include non-banking institutions and fintech companies.
Ryoo cautioned that a won-backed stablecoin could potentially disrupt South Korea’s foreign exchange system by encouraging capital flight and weakening the central bank’s ability to manage cross-border transactions. According to Yonhap News, this could increase the risk of rapid capital outflows to foreign stablecoins, especially during economic instability.
Eight top South Korean institutions, including KB Kookmin, Shinhan, and Woori banks, are collaborating to launch a stablecoin fully backed by the Korean won on a 1:1 basis. The project is coordinated with the Open blockchain and DID Association and the Financial Settlement Institute. Two issuance models, a trust-based framework and a deposit-linked structure, are under consideration, both aiming for full Korean won reserves backing each stablecoin unit.KB Kookmin Bank has already filed trademark applications for its stablecoin designs.