With the support of South Korea's policies, can Kaia public chain enter the "stablecoin summer"?

Author: Zen, PANews

This week, Kaia public chain has become one of the focuses of the crypto market with its strong token growth. Since its merger with Klaytn and Finschia in August 2024, Kaia has continued to work hard on technical performance and ecological construction; and its recent actions in stablecoins and payment scenarios have made it a hot topic among industry investors. The CEO of the foundation publicly stated that "Kaia's stablecoin summer is coming", indicating that its fiat currency anchored token plan is about to enter the landing period.

Since the inauguration of the new President Lee Jae-myung, supporting the issuance of stablecoins anchored by the Korean won has become the latest policy trend. The Kaia team also took the opportunity to announce that it will join hands with super apps such as Kakao Pay and LINE NEXT to plan to launch a Korean won stablecoin. As soon as the news came out, Kakao Pay's stock price soared by nearly 30%, and Kaia tokens also soared, with its price rising from nearly $0.10 to a maximum of $0.17, all of which show that the market is full of expectations for the prospects of South Korea's local stablecoin projects.

Kaia stablecoin project launched with the support of policy

After the new South Korean President Lee Jae-myung proposed a policy of supporting the local currency stablecoin in 2025, Kaia responded quickly and announced plans to launch the Korean won stablecoin. After the announcement, the share price of related concept stocks such as KakaoPay rose by nearly 30%, and the market was full of expectations for the Korean won stablecoin.

The Korean won stablecoin project proposed by Kaia is jointly promoted by Kakao and LINE (in cooperation with KakaoPay, LINE NEXT, etc.), and is still in the planning stage, with no specific release schedule. With its digital wallet infrastructure and QR code payment system, Kakao Pay is also widely seen as a potential beneficiary of the local stablecoin.

The South Korean government is currently drafting the Basic Law on Digital Assets and actively discussing a regulatory framework that allows private institutions to issue stablecoins. The draft bill aims to allow non-bank institutions and payment service providers to issue stablecoins and relax the rules for cryptocurrency exchanges, enabling them to participate in lending and choose which tokens to list. Under this proposed framework, the approval authority for stablecoin issuers will no longer be borne by the Bank of Korea (BOK), but will fall into the hands of the Financial Services Commission. The bill also significantly lowers the regulatory threshold, reducing the capital requirement for issuers from the previously proposed 5 billion won to 500 million won (US$365,000).

However, according to the Korean Constitution, the right to issue legal tender belongs to the central bank, and private institutions face legal obstacles in issuing legal tender-pegged tokens. The Bank of Korea also fought back against these proposals, with Yonhap News Agency saying that the Bank of Korea showed a "panic" reaction. Its report said that the Bank of Korea had planned to hold a meeting on stablecoins to make its point: the indiscriminate issuance of stablecoins denominated in won could lead to a "currency run," thereby affecting the competitiveness of the won.

In terms of policy orientation, the head of the Digital Asset Committee of the ruling party of South Korea said that it would support private issuance and planned to clarify the legalization of stablecoins in the Basic Law. The Kakao Group, on which Kaia relies, has large-scale payment and financial infrastructure, which provides a convenient channel for the actual use of stablecoins in the future.

However, despite the enthusiastic feedback from the market, the prospects of the Kaia stablecoin project are not clear. On the one hand, compliance issues including monetary sovereignty and anti-money laundering are still difficult to overcome, and on the other hand, the issuance and redemption mechanism of the stablecoin itself has yet to be verified, and there are many potential opponents who have already targeted this piece of fat meat. During the recent experiment of the Bank of Korea with tokenized deposits and wholesale central bank digital currency (CBDC), several large banks in South Korea publicly announced plans to jointly issue stablecoins.

Therefore, in the policy opportunities, the launch and promotion of Kaia's stablecoin plan gives people a lot of imagination, but whether it can obtain regulatory approval and be successfully implemented in the future still faces many uncertainties.

Social giants band together to have 250 million "potential users"

Kaia public chain is a large-scale blockchain network mainly for Asia. It is formed by merging the Klaytn chain of South Korea's Kakao and the Finschia chain of Japan's LINE. It will be officially launched in August 2024. It aims to reach hundreds of millions of Asian users with Web3 services through seamless integration with Kakao Talk and LINE.

Kakao Talk is one of the most popular instant messaging applications in South Korea, with a penetration rate of nearly 95% and about 50 million monthly active users in South Korea; LINE, as the most popular communication platform in Japan, covers 70% of the population in Japan and has a dominant position in markets such as Thailand and Taiwan. Based on the distribution capabilities of the two major social platforms with a total of more than 250 million users, Kaia, positioned as a high-performance, easy-to-use public chain, has always been regarded as one of the "potential stocks" to promote the popularization of encrypted applications. This year, the Kaia Foundation has raised external funds from investment and financing institutions such as Blockchain Capital and 1kx to support ecological incubation and market promotion.

Before the two merged into Kaia, Klaytn was developed by Ground X, a blockchain subsidiary of Kakao, and officially launched in 2019. After its launch, it was an important representative of the Korean blockchain network. Its user base achieved an astonishing 1,100% growth in 2023, reaching 873,000; while Finschia (formerly known as LINE Chain) went online in 2022 and provided the NFT platform DOSI within LINE, with a total of more than 5.6 million users and completed approximately 560,000 NFT transactions. After the merger of the two chains, Kaia inherited Klaytn's DeFi, game and other ecosystems and Finschia's NFT, payment and other application scenarios to achieve complementary technology and users. The official vision emphasizes that Kaia will "put Web3 at the fingertips of hundreds of millions of users in Asia" and build an efficient platform to support the development of large-scale decentralized applications.

As a Layer 1 public chain compatible with Ethereum, Kaia technically inherits and optimizes Klaytn's IBFT consensus framework. Its consensus algorithm is based on the optimized Istanbul BFT, which can achieve fast final confirmation of blocks and support multi-node participation. Official documents point out that the Kaia network can handle up to 4,000 transactions per second, with a block generation time of only 1 second and instant transaction certainty. Unlike conventional PoW/PoS, Kaia adopts BFT consensus for enterprise and service scenarios to ensure that blocks are finalized once they are generated, and there is no risk of block rollback in the traditional sense. Kaia network nodes are divided into consensus nodes (CN), proxy nodes (PN) and endpoint nodes (EN). Consensus nodes are managed by core operators (CCO) and are responsible for block generation and verification. The network design ensures that more than 50 nodes can participate in consensus, taking into account throughput and decentralization.

In terms of technical features, Kaia supports functions such as account abstraction and fee agency, which greatly simplifies the user experience; at the same time, it integrates the identity and payment channels of LINE and KakaoTalk, allowing ordinary users to use on-chain services without additional registration. Kaia also maintains equivalent compatibility with EVM chains such as Ethereum, and plans to support CosmWasm smart contracts; the integration capability with the industry-leading cross-chain bridge provides developers with flexible multi-chain interoperability capabilities. It is worth mentioning that the Kaia mainnet is actually a hard fork of the original Klaytn mainnet. After the merger, all states of Klaytn are automatically inherited to the Kaia chain.

Expanding from gaming to financial services

When Kaia was first launched, the user and fund indicators were still in the initial stage. As of mid-2025, Kaia ranks around the top 50 in the world in DeFi TVL ranking, reflecting the scale of its ecosystem in its early stages. In terms of on-chain activity, Kaia officials have disclosed that more than 40 million users have visited the Mini DApp portal. The number of wallets and transaction volume grew rapidly in the early stages of the launch, but the overall level is still far lower than mature mainstream public chains such as Ethereum, Solana, and BNB.

In terms of ecology, Kaia merged the application ecology of Klaytn and Finschia to form a comprehensive ecology covering DeFi, NFT, game finance (GameFi), physical assets (RWA), etc. According to official statistics, after the merger, more than 420 decentralized applications and game services have been or are planned to be launched on the Kaia network.

In addition, at the same time as the Kaia mainnet was released, LINE NEXT and the Kaia Foundation also jointly launched a builder support program, Kaia Wave. The program aims to provide multi-party support for potential Dapps, enabling them to reach consumer users in Web2 and Web 3, and gain additional advantages from sources such as LINE Messenger, Web3 Marketing Alliance and creators, and vertical services of Kaia and LINE NEXT. According to official documents, Kaia Wave plans to provide a total value of US$10 million in KAIA tokens, dedicated to user acquisition and rewards.

In the DeFi field, Kaia has launched multiple decentralized exchanges and staking and lending projects such as KlaySwap and DragonSwap, and the platform also supports infrastructure such as stablecoins and cross-chain bridges. In terms of NFT, Kaia has inherited the user base of the Finschia DOSI platform, and its GameFi ecosystem has benefited from the user base and partner resources of the two major social platforms. Some game manufacturers have begun to launch mobile games, NFT props and other content on Kaia.

Following the example of Telegram and Ton blockchain, Dapp Portal is one of the main driving forces for the development of Kaia ecosystem in terms of Mini DApp distribution and user reach. Dapp Portal is based on Kaia chain and is open to users through the official account of LINE Messenger. Users can access Mini DApps such as games, social networking, and transactions in the chat interface without downloading and installing any new applications. In January this year, LINE NEXT and Kaia jointly launched the first batch of 32 Mini DApps, allowing users to create wallets, play games, receive rewards, trade NFTs, etc. in one click without installing a separate client.

In terms of official strategy, Kaia is gradually expanding from the gaming field to financial services and general applications: a US dollar stablecoin income product was launched on the LINE side in early 2025. Subsequent plans include the introduction of DeFi protocols such as lending, perpetual contracts, payments and asset tokenization, as well as the realization of seamless exchange functions between Korean won and stablecoins.

In May this year, Tether officially deployed its USDT stablecoin on Kaia, providing stablecoin payment and cross-border transfer services to LINE's 196 million users, marking the further expansion of Kaia's layout in the international stablecoin ecosystem. In general, Kaia is accelerating the construction of a platform-level ecosystem and working with industry partners to promote the use scenario of "message as entry, on-chain as payment".