Key Takeaways:
- Eight major banks in South Korea are developing a stablecoin pegged to the won, aiming for a late 2025 or early 2026 launch.
- The move addresses the dominance of U.S. dollar-backed stablecoins, which currently comprise over 99% of the market.
- The project is part of a broader regulatory and technological transformation in South Korea’s financial sector, backed by upcoming digital asset legislation.
Eight of South Korea’s leading banks are joining forces to issue a stablecoin pegged to the Korean won. This historic collaboration is seen as a strategic move to combat the dominance of U.S. dollar-backed stablecoins and assert South Korea’s presence in the global digital finance market.
Major Korean Banks Unite for Stablecoin Innovation
According to a report from Econovill, the initiative includes heavyweight institutions such as KB Kookmin Bank, Shinhan Bank, Woori Bank, Nonghyup, Suhyup, Citibank Korea, SC First Bank, and IBK Corporate Bank. The banks are planning to issue a won-pegged stablecoin backed by a 1:1 deposit model—pending regulatory approval.
The Korea Financial Telecommunications and Clearings Institute, alongside blockchain nonprofit Open Blockchain and the Decentralized Identity Association, are set to support the project. This marks one of the first major moves by South Korea’s traditional banking sector into the blockchain space.
A Response to the Dominance of Dollar-Based Stablecoins
Data from RWA.xyz shows that stablecoins now have a total market capitalization of $239 billion, with over 99% of them pegged to the U.S. dollar. This overwhelming dominance has raised concerns among financial policymakers worldwide, and South Korea is now taking action to balance the scales with a local currency alternative.
By launching a won-pegged stablecoin, South Korean banks aim to offer domestic and international users a non-dollar option, potentially boosting the local economy and reducing reliance on foreign currency-backed digital assets.
Legislative and Regulatory Momentum Grows
The stablecoin project aligns with South Korea’s broader push toward comprehensive digital asset regulation. On June 10, 2025, the country’s ruling party introduced the Digital Asset Basic Act, a legislative proposal designed to enable stablecoin issuance and enhance the domestic crypto market.
Also Read: South Korea Backs Gradual Stablecoin Rollout — With Banks Leading the Charge
While the regulatory environment is still evolving, the involvement of major banks signals growing confidence in the sector’s potential. However, Bank of Korea Governor Rhee Chang-yong warned that easier convertibility between the won and dollar through stablecoins could introduce monetary control risks. Even so, the central bank appears open to gradual experimentation, with Deputy Governor Ryoo Sangdai suggesting banks should lead the rollout in a controlled manner.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
