Market News

South Korea Enters the Stablecoin Arena with KakaoBank's KRW-Backed Initiative

South Korea's KakaoBank is making waves by planning to launch a stablecoin backed by the Korean Won (KRW) within this year.

The bank's CFO, Kwon Tae-hoon, announced during a recent earnings call that they are actively exploring issuance and custody options in the digital asset space.

Kakao Group is also forming a dedicated task force for stablecoins, involving key leaders from Kakao, KakaoPay, and KakaoBank in strategic discussions.

Kwon emphasized the bank's strong risk management and technical capabilities, having previously engaged in Bank of Korea's CBDC pilot projects.

With a new government led by President Lee Jae-myung, financial policies in South Korea are being reshaped, and stablecoins are a focal point of these discussions.

The President has promised the introduction of a KRW-pegged coin aimed at facilitating business transactions and international trade.

This initiative has sparked significant market speculation, particularly following increases in interest toward stablecoins among retail investors in Korea.

Reports indicate that the USDC issuer, Circle, has become a popular stock among these investors, marking a shift in local market dynamics.

However, skepticism remains, as Bank of Korea Governor Lee Chang-yong questions the feasibility of the government's stablecoin plans.

As the stablecoin landscape evolves in the region, both domestic and global entities are closely monitoring these developments.