South Korea’s Biggest Banks Join Forces on Won-Backed Stablecoin

A group of South Korea’s top commercial banks is taking a major step toward launching a stablecoin tied to the Korean won. A consortium including KB Kookmin, Shinhan, Woori, Nonghyup, Industrial Bank of Korea, Suhyup, Citi Korea, and Standard Chartered Korea is leading the plan. Their goal is to bring a bank-issued digital won to market by the end of 2025 or early 2026.

The idea behind this collaboration is to offer an alternative to the rising dominance of dollar-based stablecoins like USDT and USDC.  Traders and users across South Korea’s crypto ecosystem have widely used these foreign assets, often to fill gaps in payments and trading. But with nearly 57 trillion won worth of dollar stablecoin trade volume moving through the country in the first quarter of 2025, local banks are clearly looking to take back control.

Domestic Push for Monetary Control

This stablecoin initiative is closely tied to growing concerns about monetary sovereignty. Financial authorities and lawmakers are becoming uneasy about how much influence foreign-denominated digital assets now have on local transactions. Some view it as a gradual loss of national control, especially since private firms outside Korea issue and manage the currency used by Korean traders and consumers.

Banks working on the won-backed stablecoin are being supported by the Open Blockchain and DID Association, along with the Korea Financial Telecommunications and Clearings Institute. These institutions are handling technical development and potential regulatory models. Two structures are being considered. One would involve holding user funds in trust, while the other would issue tokens directly against customer deposits.

Central Bank Reactions

The Bank of Korea has responded cautiously. Deputy Governor Ryoo Sang-dai said any rollout should begin with licensed commercial banks and only later expand to other firms. Governor Rhee Chang-yong acknowledged the potential upside of a domestic stablecoin but also flagged possible side effects. One concern is that making it easier to exchange between stablecoins might actually increase demand for dollar-backed assets, not reduce it.

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The central bank is already working on its own wholesale CBDC model for institutions. However, it appears willing to let commercial banks take the lead on a retail-facing stablecoin, as long as the rules are clear and the process is gradual.

Laying the Ground for Regulation

The stablecoin rollout also aligns with a broader legislative effort. The Democratic Party is advancing the Digital Asset Basic Act to define and regulate digital assets, including stablecoins. Lawmakers expect this law to set the foundation for how these tokens can be issued, who can manage them, and what level of transparency is required.

At the same time, some banks like KB Kookmin have already filed trademarks for names such as KBKRW and KRWST, indicating that development is well underway. Legal reviews and compliance checks are still in progress, but if everything stays on schedule, pilots could begin in late 2025.

Looking Ahead

South Korea is not the only country exploring this route. Japan is rolling out bank-backed stablecoins under its own regulatory framework, and Europe is moving forward under MiCA. What sets South Korea apart is the scale and speed of coordination between major banks. By moving together, they hope to launch something trusted, regulated, and fully backed by Korean financial institutions.

Whether this stablecoin ends up reshaping local payments or simply coexists with dollar tokens will depend on how it’s received by users and how effectively regulators and banks handle its launch. What is clear is that South Korea is preparing to take a more active role in how digital money works inside its borders.

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