South Korea’s eight leading banks have formed a consortium to issue a Korean won-pegged stablecoin, aiming for a launch between late 2025 and early 2026.
The group includes KB Kookmin Bank, Shinhan Bank, Woori Bank, NH NongHyup Bank, IBK Industrial Bank, Suhyup Bank, SC First Bank, and Citibank Korea. Their goal is to reduce reliance on U.S. dollar-based stablecoins while promoting digital innovation within the domestic financial system.
“Two issuance models under review — banks take the lead”
The consortium is currently evaluating two issuance mechanisms:
The first is a trust-based model, where user funds are held in segregated accounts and equivalent stablecoins are minted;
The second is a deposit-linked model, where stablecoins are issued in a 1:1 ratio to the deposited Korean won.
The final model will depend on regulatory developments and technological infrastructure. The banks are also collaborating with the Open Blockchain & DID Association and the Korea Financial Telecommunications & Clearings Institute (KFTC) to establish shared blockchain-based infrastructure, including identity verification and payment rails.
Central Bank cautiously supportive: “Step-by-step introduction”
The Bank of Korea has expressed cautious support. Deputy Governor Ryu Sang-dae suggested that banks should initially pilot stablecoin issuance, with the possibility of expanding to non-banking institutions later.
Governor Rhee Chang-yong, however, voiced concerns about the ease of conversion between won-based and dollar-based stablecoins, warning it could impact foreign exchange controls if capital outflows accelerate.
Government prepares legal framework through Digital Asset Basic Act
Meanwhile, lawmakers are pushing to institutionalize stablecoin issuance through the Digital Asset Basic Act, which is currently under deliberation in the National Assembly. If passed, the bill would establish a clear legal framework for private stablecoin issuers, potentially opening the door to securities firms and fintechs as participants.
Korea explores digital won via private-sector first
While separate from the Bank of Korea’s central bank digital currency (CBDC) initiatives, this move marks the first private-sector-led experiment with a digital won. It reflects a strategic push to strengthen the Korean won’s role in digital finance, balancing innovation with monetary policy control.
