South Korean Banks Unite to Launch Won-Pegged Stablecoin by 2026

Eight major South Korean banks are joining forces to launch a stablecoin pegged to the Korean won, marking a significant advancement in the country's digital asset adoption. The project, which involves institutions such as KB Kookmin, Shinhan, Woori, Nonghyup, Corporate, Suhyup, Citi Korea, and SC First Bank, aims to counter the growing dominance of dollar-pegged stablecoins.

This initiative is driven by the need to position South Korea competitively in the global digital finance market. The banks are exploring two models for the stablecoin issuance: a trust-based model where customer funds are separately entrusted, and a deposit-linked model where stablecoins are issued based on deposited funds. Both models ensure that the stablecoin is fully backed by the Korean won, providing stability and trust in the digital asset.

The project is expected to materialize in late 2025 or early 2026, subject to regulatory approval. This move aligns with a broader legislative push to establish a clear regulatory structure for digital assets in South Korea. On June 10, the country's ruling party proposed the Digital Asset Basic Act, which aims to allow stablecoin issuance and boost the growth of crypto markets.

Bank of Korea Governor Rhee Chang-yong has expressed concerns that the creation of the stablecoin could make it easier for holders to exchange the currency for the dollar, potentially hurting the won and making it difficult for the central bank to manage. However, he has not opposed the issuance of a won-pegged stablecoin. Deputy Governor Ryoo Sangdai has advocated for a gradual rollout, suggesting that banks should be the first entities to issue them to ensure a safety net.

The stablecoin initiative is supported by the Korea Financial Telecommunications and Clearings Institute, as well as the blockchain-focused nonprofit Open Blockchain and the Decentralized Identity Association. This collaboration underscores the strategic importance of this venture for South Korea's financial future, aiming to facilitate more domestic payments and cross-border remittances while safeguarding national financial sovereignty in the digital age.