KRW Stablecoins Set to Reshape South Korea’s Financial Future

Binance and Tether, two of the most prominent names in the cryptocurrency and stablecoin sectors, are closely monitoring South Korea’s evolving regulatory and market environment. This heightened interest is driven by the country’s growing crypto adoption and its proactive approach to creating a regulated stablecoin framework. South Korea’s government and financial institutions are engaging with major global players to explore the potential of localized stablecoins, particularly those pegged to the Korean won (KRW).

Circle, the issuer of USDC, has been actively engaging with key stakeholders in South Korea, including banking leaders and fintech firms. In August 2025, Circle President Heath Tarbert met with the Bank of Korea (BoK) Governor Lee Chang-yong, as well as executives from major financial institutions such as Shinhan Financial Group, Hana Financial Group, KB Financial Group, and Woori Bank. Tarbert emphasized the importance of KRW-denominated stablecoins for both domestic and international transactions and suggested that Circle could either issue such a stablecoin or partner with local entities to ensure compliance and efficiency [1].

Circle’s strategic move aligns with its global initiative to expand its stablecoin offerings beyond the U.S. dollar. USDC is already available on leading Korean exchanges like Bithumb and Upbit, and the company is now exploring the possibility of issuing a won-backed stablecoin. Tarbert highlighted the potential for integrating such a stablecoin with Circle’s existing USDC infrastructure, which could streamline blockchain-based payments and settlement processes in the region [2].

Tether, the issuer of USDT, has also been engaging with South Korean banks, albeit with a more low-profile approach. While no public agreements have been announced, Tether’s CEO Paolo Ardoino reportedly met with executives from Hana Bank and KB Bank. USDT remains highly popular among Korean investors, accounting for nearly 70% of global stablecoin circulation. Tether’s increased presence in the country coincides with its recent status as the 18th largest holder of U.S. Treasuries, underscoring the growing influence of stablecoins in global financial markets [3].

South Korea’s political landscape has also seen significant developments in stablecoin regulation. In late July 2025, the country’s two major political parties introduced rival stablecoin bills, with debates centering on whether to ban interest payments on stablecoins. The ruling Democratic Party (DP) argues against such payments to prevent market disruptions, while the opposition People Power Party (PPP) believes allowing interest is essential for maintaining the competitiveness of KRW-based stablecoins. These legislative efforts reflect the country’s broader ambition to become a global hub for regulated stablecoin innovation [4].

The country’s crypto ecosystem is already robust, with over 10,000 South Koreans holding more than 1 billion won in digital assets and one in five citizens investing in cryptocurrency. Younger investors, particularly those in their 20s, have the highest average balances, indicating a strong generational shift in financial behavior. South Korea’s favorable tax environment for crypto has further fueled adoption, though this is set to change in early 2026 when a 20% capital gains tax on annual crypto income over 50 million won will take effect [5].

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[1] Circle sees Korea as a key hub for global stablecoin growth (https://thepaypers.com/crypto-web3-and-cbdc/news/circle-sees-korea-as-a-key-hub-for-global-stablecoin-growth)

[2] Tether And Circle Court South Korean Banks As Nation ... (https://99bitcoins.com/news/altcoins/tether-and-circle-court-south-korean-banks-as-nation-prepares-stablecoin-regulatory-framework/)

[3] South Korea's Billion-Won Crypto Investor Club Expands ... (https://www.ccn.com/news/crypto/south-korea-billion-won-crypto-investor-club-expands/)