South Korea to Launch Won-Backed Stablecoins Boosting Crypto Market

South Korea, under the leadership of President Lee Jae-myung, is set to launch won-backed stablecoins as part of a comprehensive pro-crypto agenda announced in June 2025. This initiative aims to bolster the national economy by establishing a domestic digital currency market, which could significantly impact global stablecoin markets and enhance the legitimacy of cryptocurrencies within the country.

President Lee Jae-myung has emphasized the importance of developing won-backed stablecoins to prevent national wealth from leaking overseas. The Financial Services Commission is expected to lift bans on Korean won-based stablecoins, paving the way for key players like Kakao Pay to enter the market. Kakao Pay has already filed for patents, demonstrating its readiness to participate in the stablecoin market.

This move by South Korea mirrors previous actions by the EU and Japan in stablecoin regulation. The country's earlier bans on cryptocurrencies, driven by concerns over financial risks, have been overturned by the current administration's pro-crypto stance. Experts suggest that the emerging regulatory environment could boost investor confidence and strengthen South Korea's position in the digital currency market. The initiative is expected to provide users with a stable and secure digital currency option, which can be used for various transactions, thereby contributing to the growth of the cryptocurrency ecosystem.

Kakao Pay, a leading digital payment platform, has filed for 18 trademarks related to a potential Korean won (KRW)-backed stablecoin. The trademark applications, which include names like “KRWKP,” “KWRP,” and “KPKRW,” are registered under financial service categories, indicating Kakao Pay's preparations to enter the digital asset market. Industry sources view these filings as a clear indication that Kakao Pay is positioning itself to become a major issuer in the KRW stablecoin market once regulations are in place. The company has described the filings as a “precautionary measure” to secure branding rights, although it has not yet announced a finalized plan for a stablecoin.

The market has reacted positively to these developments, with Kakao Pay’s stock price rising significantly in the past month. This surge reflects investor anticipation for the company’s entry into the digital asset space. Kakao Pay’s preparations align with a favorable political and regulatory environment in South Korea. The country’s lawmakers have introduced the “Basic Digital Asset Act,” which would officially permit private companies to issue KRW-backed stablecoins. Financial analysts note that Kakao Pay is well-positioned to issue a stablecoin, as the company currently holds approximately $429 million in prepaid user balances, which could serve as collateral for the token.

The approval of KRW stablecoins is expected to have a positive impact on the overall cryptocurrency market in South Korea. The introduction of a stablecoin backed by the South Korean won will provide users with a stable and secure digital currency option, which can be used for various transactions. This will not only benefit Kakao Pay but also contribute to the growth of the cryptocurrency ecosystem in the region. The growing acceptance of stablecoins as a viable digital currency option is expected to drive further innovation and adoption in the cryptocurrency space.

In conclusion, the launch of won-based stablecoins in South Korea is a significant development that could reshape the cryptocurrency landscape. The initiative, backed by the government and supported by leading digital payment platforms like Kakao Pay, is expected to provide users with a stable and secure digital currency option. This move is likely to drive further innovation and adoption in the cryptocurrency space, benefiting both Kakao Pay and the overall cryptocurrency ecosystem.