Market News

South Korea's Ambitious Move: Launching a Won-Pegged Stablecoin

In an exciting development, eight major banks in South Korea have announced plans to launch a stablecoin pegged to the Korean Won by 2026.

This initiative aims to reduce the country's reliance on US dollar-backed stablecoins that currently dominate the market.

The consortium includes notable institutions such as KB Kookmin, Shinhan, and Woori Bank, marking a significant step for traditional banks into the digital asset space.

Collaborating with the Open Blockchain and the Korea Financial Telecommunications and Clearings Institute, the banks are considering two primary issuance models for the new stablecoin.

Pending regulatory approval, they anticipate launching the stablecoin by late 2025 or early 2026.

This project aligns with a wider legislative effort in South Korea to create a transparent regulatory framework for digital assets.

While promoting the initiative, President Lee Jae Myung advocates for transforming the Korean Won's role in the digital economy through supportive crypto policies.

However, the Bank of Korea's Governor Rhee Chang-yong has raised concerns about potential risks to foreign exchange management.

His deputy, Ryoo Sang-dai, has recommended a gradual rollout, starting with stringent regulations for banks before extending to other sectors.

As governments worldwide explore similar stablecoin innovations, South Korea's endeavor could pave the way for enhanced independence in the digital currency landscape.