- Eight major South Korean banks have formed a consortium to launch a won-backed stablecoin, marking the country’s first private-sector-led venture into digital currency.
- With regulatory support and two issuance models proposed, the initiative aims to boost financial sovereignty and modernize South Korea’s digital asset ecosystem.
Eight major commercial banks have formed a consortium to launch a won-pegged stablecoin. This joint initiative, announced on Wednesday, marks the country’s first consortium-led venture into the stablecoin market by traditional banking institutions.
The alliance includes leading banks such as KB Kookmin, Shinhan, Woori, Nonghyup, Industrial Bank of Korea, Suhyup, Citibank Korea, and SC First Bank. The venture is supported by the Open Blockchain and DID Association, alongside oversight from the Financial Supervisory Service.
The move aligns with the Bank of Korea’s (BOK) strategy to explore stablecoin deployment through a phased, cautious rollout. Senior deputy governor Ryoo Sang-dai expressed support for allowing commercial banks to gradually introduce won-denominated stablecoins, marking a significant shift in regulatory tone.
Two Stablecoin Models Proposed
The banks have already outlined two models for issuing the stablecoin: a trust-based model and a deposit-linked model. In the trust model, coins would be issued after customer funds are separately entrusted, ensuring additional safeguards.
The deposit-linked model, on the other hand, would issue coins backed 1:1 by traditional bank deposits, mirroring frameworks seen in existing fiat-backed stablecoins globally.
“This is a critical step to preserve financial sovereignty,” one banking official stated. “There’s a real concern that if we don’t act, foreign dollar stablecoins could dominate South Korea’s digital economy.”
Regulation and Presidential Support
The announcement comes at a time when South Korea is actively shaping its digital asset regulations. The Digital Asset Act, recently introduced in the National Assembly, proposes a clear authorization framework for stablecoin issuance, potentially paving the way for these bank-led projects.
Adding political momentum, President Lee Jae-myung has publicly backed the idea of a won-backed stablecoin. During his campaign, he pledged to implement a KRW-pegged digital currency to help modernize trade and reduce capital flight, estimated at over $40 billion due to crypto outflows.
Private Sector Model vs. Central Bank Digital Currency
Unlike the Central Bank Digital Currency (CBDC) initiative being developed by the Bank of Korea, this bank-led stablecoin venture represents a private sector-driven model. While further dialogue is needed to determine technical interoperability with the BOK’s CBDC, early discussions suggest the project could eventually support cross-border payments and domestic transactions alike.
The consortium expects the official launch to take place either by the end of 2025 or early 2026, depending on the progress of regulatory approvals and technical development.
As stablecoins continue to gain traction globally, especially following the U.S.’s GENIUS Act. South Korea’s banking sector is now positioning itself at the forefront of the digital currency evolution. The won-backed stablecoin could soon play a key role in reshaping both domestic finance and international trade.