• South Korea’s top banks are working together to launch a stablecoin tied to the Korean won.
• This new digital currency will combine the security of traditional banking with the speed of blockchain.
• It’s a big step toward a more modern, digital-friendly financial system in South Korea.

In a major move that could reshape the future of digital finance in South Korea, eight of the country’s leading banks have come together to create a won-backed stablecoin. This joint venture, in partnership with the Open Blockchain & DID Association and the Financial Settlement Institute, aims to provide a homegrown alternative to foreign-issued digital currencies. The announcement reflects a growing push in South Korea to stay ahead in the fast-moving world of blockchain technology and decentralized finance.

This new stablecoin, which will be pegged to the South Korean won, is designed to offer the stability of a fiat currency with the convenience of blockchain-based transactions. If successful, it could strengthen the country’s position in the global digital asset landscape while offering consumers and businesses a reliable way to make and receive payments.

The Institutions Behind the Project

The joint venture includes some of the biggest names in South Korean banking: KB Kookmin, Shinhan, Woori, NongHyup, Industrial Bank of Korea, Suhyup, Citibank Korea, and SC First Bank (Standard Chartered Korea). These banks are not only well-established but also deeply integrated into the country’s financial infrastructure. By working together, they bring credibility, scale, and trust to the stablecoin initiative.

Joining forces with the Open Blockchain & DID Association and the Financial Settlement Institute ensures that the project will benefit from both technical expertise and regulatory insight. The Financial Settlement Institute, also known as the Korea Financial Telecommunications and Clearings Institute, plays a key role in managing South Korea’s payment systems. Their involvement signals strong institutional backing for this new digital currency.

Why South Korea Is Embracing Stablecoins

South Korea has long been known for its openness to technology and innovation. From high-speed internet to digital payments, the country has often been a global leader. Now, as the world shifts toward decentralized finance, South Korea is taking a proactive step to ensure its financial system adapts to this change.

Stablecoins offer many potential benefits. They can speed up transactions, reduce fees, and make cross-border payments more efficient. But until now, most of the widely-used stablecoins have been tied to the US dollar. South Korean regulators and financial institutions are concerned that relying too heavily on foreign digital currencies could weaken the country’s monetary sovereignty. By creating a won-based stablecoin, they aim to maintain control over domestic finance while still embracing the benefits of digital innovation.

How the Stablecoin Will Work

Although full technical details have not yet been released, two models are reportedly being considered for the new stablecoin. One is a trust-based model, in which reserves are held by a designated third party to back each coin in circulation. The other is a deposit-based model, where the coins are directly linked to funds held in the issuing banks.

In both cases, transparency and stability will be top priorities. The banks involved are expected to ensure that each stablecoin unit is fully backed by actual South Korean won reserves. This will help build trust among users, regulators, and financial partners.

Regulatory Support and Caution

The project is moving forward at a time when South Korean regulators are paying close attention to the role of digital assets in the economy. The country’s Financial Services Commission recently laid out a roadmap for crypto regulation, including provisions for stablecoins and crypto ETFs. While the Bank of Korea has voiced support for exploring won-based stablecoins, it also emphasized the need for careful oversight, especially to avoid any negative impact on the country’s foreign exchange system.

The banks and institutions involved in the stablecoin project are working closely with regulators to ensure full compliance. This collaborative approach could serve as a model for other countries looking to develop their own central or commercial bank digital currencies.

What This Means for the Future

The creation of a South Korean won-based stablecoin could have far-reaching effects, both at home and abroad. Domestically, it could lead to more efficient payments, better financial inclusion, and a reduced reliance on cash. Internationally, it could position South Korea as a leader in the regulated digital currency space.

The rollout is expected to take place gradually, with pilot programs likely starting in late 2025 or early 2026. If the early trials are successful, this stablecoin could become a standard part of how Koreans transact, save, and do business in the digital age.