Six corporate groups are racing to issue the first Korean won-pegged stablecoin, collectively representing over 100 million user accounts across banking, payments, and crypto exchange platforms. The prize: control of South Korea's digital payments layer in a market where cash accounts for just 7%...
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Six corporate groups are racing to issue the first Korean won-pegged stablecoin, collectively representing over 100 million user accounts across banking, payments, and crypto exchange platforms. The prize: control of South Korea's digital payments layer in a market where cash accounts for just 7% of point-of-sale transactions and 18 million residents — over a third of the adult population — already hold cryptocurrency.
The race is stalled by a regulatory deadlock. South Korea's Digital Asset Basic Act, originally targeted for Q1 2026 passage, remains stuck in subcommittee deliberations as of April 2026. The central dispute — whether stablecoin issuers must have 51% bank ownership — has split the Bank of Korea and the Financial Services Commission. Meanwhile, $40 billion flowed out of Korean crypto exchanges into foreign stablecoins in Q1 2025 alone, underscoring the cost of inaction.
The competitors — BDACS/Woori Bank, Kakao, Naver/Dunamu, Toss, an eight-bank consortium, and Coupang Pay — are building infrastructure in advance of legislation. The outcome will determine how the world's most cashless major economy programs its money.
South Korea's stablecoin urgency is driven by measurable capital outflows. According to Seoulz, $40 billion exited Korean crypto exchanges into foreign-denominated stablecoins — primarily USDT and USDC — during Q1 2025. These flows represent domestic users converting won into dollar-pegged tokens to access DeFi yields, cross-border transfers, and trading pairs unavailable on regulated Korean exchanges.
The country's 16 million registered crypto exchange users, as of February 2025, operate under the 2024 Virtual Asset User Protection Act, which established investor safeguards but did not authorize domestic stablecoin issuance. The result: Korean users must route through foreign stablecoin infrastructure to access on-chain financial services.
South Korea's Financial Services Commission is preparing corporate digital asset investment guidelines that would exclude dollar-denominated stablecoins like USDT and USDC from the approved list. This policy, if enacted, would effectively require a domestic won-pegged alternative — one that does not yet exist at scale.
The first mover. BDACS launched KRW1, a won-pegged stablecoin, on the Avalanche blockchain in September 2025 in partnership with Woori Bank. The token is fully collateralized 1:1 with Korean won held at Woori Bank. BDACS trademarked the KRW1 brand in December 2023 and announced a partnership with Plume network in February 2026, integrating with $645 million in tokenized assets.
KRW1 remains the only live Korean won stablecoin, though its circulation is limited by the absence of a domestic regulatory framework authorizing broader issuance and distribution.
Kakao is assembling a vertically integrated stablecoin stack. KakaoPay (42 million registered users), KakaoBank (the country's largest digital-only bank), and KakaoTalk are being linked into a unified digital wallet with wallet-to-wallet (W2W) payment capability that bypasses traditional intermediaries.
The technical layer runs on Kaia, a public Layer-1 blockchain created from the 2024 merger of Klaytn and Finschia. Kakao has filed six stablecoin trademark applications, including PKRW, KKRW, and KRWP. CEO Jung Shin-ah announced a global "fandom OS" strategy in January 2026. KakaoBank has moved its "Kakao Coin" stablecoin project into active development, hiring blockchain engineers.
The largest deal in Korean crypto history is pending. Naver Financial is acquiring Dunamu, operator of Upbit (Korea's largest and the world's fourth-largest crypto exchange by volume), in a $10.3 billion transaction. Shareholder vote: May 22, 2026. Expected close: June 30, 2026.
The merged entity would combine Naver Pay's 34 million users with Upbit's 8 million active traders, creating a projected 50 trillion won (~$35 billion) market cap entity. Naver is developing GIWA, a custom Ethereum Layer-2 blockchain for stablecoin issuance. Integration targets include Naver's shopping platform, webtoon service, CHZZK video streaming, and Zepeto metaverse. The firm piloted blockchain-based payments with Dongbaek-jeon, a municipal digital currency used by 1.5 million monthly users in Busan.
Note: Dunamu was fined $24.3 million in late 2025 for customer identification violations. The Naver-Dunamu merger has been delayed approximately three months due to regulatory uncertainty around the Digital Asset Basic Act.
Toss, with 30 million registered users and approximately 24 million monthly active users, is pursuing both a proprietary blockchain and stablecoin issuance. A Stablecoin Task Force led by Chief Business Officer Kyuha Kim filed 24 KRW stablecoin trademarks in June 2025, including "TOSSKRW."
The company is weighing a Layer-1 mainnet build versus a Layer-2 deployment. Corporate Development Director Seo Chang-whoon presented a "Money 3.0" framework at the Seoul Blockchain Meetup Conference in March 2026, describing programmable money that is "universal, programmable, verifiable, composable and seamless." Toss has been recruiting blockchain engineers since February 2026 across wallet systems, node operations, cryptographic signing, and financial compliance.
Toss reported 2025 revenue of approximately $1.8 billion (38% year-over-year growth), operating profit of $251 million (270% increase), and net profit of $151 million. The company is planning a U.S. IPO in Q2 2026 at a valuation exceeding $10 billion, potentially raising $2-3 billion — which would be the largest U.S. IPO by a South Korean company since Coupang's $4.6 billion raise in 2021.
The company plans to deploy 500,000 payment terminals by late 2026 and 700,000 by 2027, creating offline rails for stablecoin payments.
Eight major commercial banks — KB Kookmin, Shinhan, Woori, NongHyup, Industrial Bank of Korea, Suhyup, Citibank Korea, and Standard Chartered First Bank — announced joint development of a won-pegged stablecoin in mid-2025. A separate consortium consisting of Hana Financial, BNK Financial, iM Bank, and SC First Bank is also forming.
Shinhan is testing stablecoin payments through its Ddangyo food delivery platform. Woori is integrating stablecoin capability into Samsung Wallet. KB Kookmin has patented a hybrid credit card system combining traditional card rails with stablecoin settlement.
South Korea's e-commerce leader, with $33 billion in annual revenue, posted legal job listings in March 2026 for stablecoin issuance roles. Coupang's primary use case is seller remittance: the company makes payments to international merchants and estimates stablecoin adoption could save approximately $200 million annually in foreign exchange and settlement costs.
The Digital Asset Basic Act has become the bottleneck. The bill, proposed by the ruling Democratic Party on April 8, 2026, would establish licensing, registration, and reporting requirements for digital asset businesses, create a digital asset committee for policy coordination, and define stablecoins as "value-linked digital assets" subject to authorization, reserve requirements, and redemption obligations.
The 51% rule dispute. The Bank of Korea insists that won-pegged stablecoin issuers must be entities where banks hold at least a 51% ownership stake. The FSC has warned this threshold would suppress competition and block fintech firms with the technical capacity to build blockchain infrastructure. The Korea Internet Corporations Association has labeled the proposal protectionist.
Stablecoin reserves. The draft requires issuers to maintain reserves exceeding 100% of circulating supply, held at banks or approved institutions and separated from the issuer's balance sheet. Minimum capital: 5 billion won (~$3.5 million).
Exchange ownership caps. A separate dispute involves proposed 20% caps (34% for corporates) on major shareholders of crypto exchanges. All five major won-denominated exchanges currently exceed these thresholds. Upbit chairman Song Chi-hyung owns 25.53%; Bithumb Holdings owns 73.56% of Bithumb.
Compounding delays. Legislative progress has been disrupted by Middle East conflict fallout (won-dollar rate at approximately 1,500), June 2026 local elections that are pushing livelihood bills ahead in priority, and a Bank of Korea leadership transition. Incoming governor Shin Hyun-song has previously expressed negative views on stablecoins.
One unnamed cryptocurrency official told the Seoul Economic Daily that passage "within this year looks uncertain," with implementation potentially delayed "until next year or even the year after."
Despite regulatory ambiguity, all six groups are building. The infrastructure race reflects a bet that the legislation will eventually pass and that first-mover advantage in wallet integration, merchant terminals, and blockchain deployment will determine market share.
Blockchain layer. The competitors span three architectural approaches: public Layer-1 (Kaia for Kakao; potentially Toss), Ethereum Layer-2 (GIWA for Naver/Dunamu), and existing public chains (Avalanche for BDACS/Woori). The bank consortium's technical approach has not been publicly specified.
Wallet integration. All major players are embedding stablecoin wallets into existing super-apps rather than requiring separate downloads. Toss, Kakao, and Naver each control apps with 30+ million users, meaning distribution is a function of software updates rather than user acquisition.
Merchant acceptance. Toss's terminal deployment (500,000 by late 2026) and Woori's Samsung Wallet integration are targeting offline retail, a segment where South Korea's 93% digital payment penetration creates a natural bridge from card-based to token-based settlement.
Cross-border rails. Sooho.io's Project Namsan has demonstrated FX fee reduction from approximately 1% to 0.3% using stablecoin settlement. Coupang's focus on international seller payments targets the same cost arbitrage at scale.
South Korea's mobile payment market reached $57.8 billion in 2025 and is projected to grow to $193.5 billion by 2034 at a 14.36% CAGR, according to IMARC Group. The stablecoin layer, if it captures even a fraction of these flows, represents a multi-billion-dollar annual revenue opportunity in transaction fees, float income, and data monetization.
The broader context: the global stablecoin market is projected at $1-4 trillion by 2030, according to BCG's Shin Seung-hwan, who has described stablecoins as "the fastest-commercializing sector among all digital assets."
For the competing groups, the economic logic varies:
President Lee Jae-myung, elected in 2025 on a pro-crypto platform, has signaled support for digital asset development, but the regulatory apparatus — split between the FSC, Bank of Korea, and National Assembly — has not unified around implementation specifics.
South Korea's won stablecoin race is the most concentrated corporate competition for digital currency issuance in any single national market. The six groups collectively control the financial infrastructure used by a majority of the country's 52 million residents. The regulatory deadlock, while frustrating for participants, has not slowed infrastructure investment — it has accelerated it, as each group seeks to be ready on day one.
The outcome depends on three variables: the final form of the 51% bank ownership rule, the timeline for the Digital Asset Basic Act (which one industry official estimates may not be implemented until 2027 or 2028), and whether the Naver-Dunamu merger closes on schedule. Until then, $40 billion in annual outflows to foreign stablecoins continues to exit a payment ecosystem that is 93% digital but 0% on-chain.