KakaoBank to Launch KRW-Backed Stablecoin Amid South Korea's Regulatory Shift

KakaoBank, South Korea’s leading digital bank and subsidiary of Kakao Group, is set to enter the cryptocurrency market by launching a stablecoin pegged to the South Korean won (KRW), according to recent disclosures during its first-half 2025 earnings report. The initiative, outlined by Chief Financial Officer Kwon Tae-hoon, involves exploring both issuance and custody of digital assets, with a primary focus on stablecoin operations. KakaoBank plans to leverage its existing infrastructure, including its three-year history of real-name verified accounts and robust KYC/AML systems, to build a secure and compliant platform for digital asset transactions [1].

The bank’s entry into the crypto space is part of a broader regulatory shift in South Korea, where the newly elected President Lee Jae Myung has advocated for a domestic stablecoin ecosystem to prevent capital flight and promote innovation. A draft bill introduced by a ruling party Member of Parliament aims to establish a legal framework for won-based stablecoins, which would allow banks and fintech firms to directly issue and manage such products without intermediaries [1].

KakaoBank’s strategic move follows KakaoPay’s recent trademark applications for potential stablecoin symbols, indicating a coordinated effort by the Kakao Group to dominate the emerging market. The bank has also participated in Bank of Korea-led CBDC trials, gaining experience in digital wallet creation, remittance, and transaction processing—key components of its stablecoin infrastructure [1].

The company’s strong financial performance in the first half of 2025 provides a solid foundation for its new venture. KakaoBank reported a 11% year-on-year increase in operating profit, reaching 353.2 billion won ($254 million), alongside a 19% growth in deposit balances to 63.7 trillion won ($45.8 billion). Its user base expanded to 25.86 million, nearly half of South Korea’s population [1].

Analysts note that stablecoins could serve as a practical use case for blockchain technology in everyday applications. Seo Byung-yoon of DSRV Lab’s Future Finance Research Institute has highlighted their potential to move beyond speculative markets and into real-world utility [2]. However, the regulatory environment remains in development, with no comprehensive framework yet in place for stablecoin operations in the country.

KakaoBank’s stablecoin is expected to integrate seamlessly with its existing digital banking and payment services, potentially enhancing transaction efficiency and user experience. Given its compliance-ready infrastructure and deep regulatory engagement, KakaoBank is well positioned to navigate the evolving landscape and deploy significant capital into the digital asset space [1].

Kookmin Bank and the Industrial Bank of Korea are also preparing to enter the market, with both filing for KRW-based stablecoin trademarks, signaling growing competition among major financial institutions [4].

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