Eight leading South Korean banks are set to launch a stablecoin backed by the national currency, the won, marking a significant move towards digital asset adoption. The collaboration includes KB Kookmin, Shinhan, Woori, Nonghyup, Korea Development Bank (Corporate), Suhyup, Citi Korea, and SC First Bank. The project, as reported by Econovill, aims to counter the rising dominance of US dollar-backed stablecoins in the global financial system.
The banks are working together on a stablecoin initiative designed to preserve the value of the South Korean won and strengthen the country’s position in the growing digital financial ecosystem. The effort comes amid a global surge in interest in real-world asset (RWA) tokenisation, with the stablecoin market cap surpassing $239 billion, 99% of which is linked to the US dollar, according to data from RWA.xyz.
Planned Rollout by Late 2025 or Early 2026
The won-pegged stablecoin is expected to launch in late 2025 or early 2026, marking one of the first substantial moves by traditional financial institutions in South Korea into the digital asset sector. The Korea Financial Telecommunications and Clearings Institute will support the rollout, alongside backing from Open Blockchain, a blockchain-focused nonprofit, and the Decentralized Identity Association.
The proposed model is likely to follow a trust-based or 1:1 deposit token scheme, though regulatory approval is still pending. This approach will ensure that each unit of the stablecoin is backed by an equivalent deposit in won, thereby maintaining user trust and financial stability.
New Legislation to Support Stablecoin Development
The initiative is closely aligned with a broader push for regulatory clarity in South Korea’s digital asset market. On 10 June, the ruling party introduced the Digital Asset Basic Act, which aims to establish a legal framework for stablecoin issuance and further stimulate the country’s cryptocurrency sector. The law is seen as a proactive measure to promote innovation while maintaining oversight.
Stablecoin market capitalization as of June 24, 2025. Source: RWA.xyz
This legal backing is critical as South Korea attempts to modernise its financial infrastructure and foster a robust digital economy. The act also seeks to ensure that digital asset products, including stablecoins, operate within a well-regulated environment to protect users and maintain economic stability.
Concerns from the Central Bank
Despite institutional enthusiasm, the Bank of Korea has voiced reservations. Governor Rhee Chang-yong warned that issuing a won-pegged stablecoin might inadvertently encourage users to convert their holdings into US dollars more easily, potentially weakening the national currency and complicating monetary policy. Nevertheless, he clarified that he is not fundamentally opposed to the idea.
Deputy Governor Ryoo Sang-dai also weighed in, stating that any rollout should be gradual and initially limited to bank-issued tokens to ensure a reliable safety net. He emphasised the importance of measured implementation to avoid destabilising the financial system.
A Strategic Move Amid Global Digital Finance Race
With this initiative, South Korea aims to secure its footing in the rapidly evolving global digital finance landscape. By launching a US dollar-backed stablecoin, the country hopes to provide a domestic alternative to US dollar-backed tokens, enabling greater sovereignty and resilience in financial transactions.
As the digital currency space grows increasingly competitive, South Korea’s early and coordinated efforts between government, regulators, and banks could position it as a key player in Asia’s digital economy.
