South Korea's Top Banks Unite to Launch KRW-Backed Stablecoin by 2026

Eight of South Korea's leading banks, including KB Kookmin and Shinhan, have announced a collaborative effort to develop a stablecoin backed by the Korean Won (KRW). This initiative, which involves a consortium of eight major banks, aims to introduce a bank-issued digital won to the market by the end of 2025 or early 2026. The primary goal is to provide an alternative to the prevalent use of dollar-based stablecoins like USDT and USDC in South Korea’s crypto ecosystem.

The banks are supported by the Open Blockchain and DID Association, along with the Korea Financial Telecommunications and Clearings Institute. These institutions are responsible for the technical development and potential regulatory models. Two structures are being considered: one involves holding user funds in trust, while the other would issue tokens directly against customer deposits.

The Bank of Korea has responded cautiously to the initiative. Deputy Governor Ryoo Sang-dai suggested that any rollout should begin with licensed commercial banks and only later expand to other firms. Governor Rhee Chang-yong acknowledged the potential benefits of a domestic stablecoin but also flagged possible side effects, such as increased demand for dollar-backed assets if stablecoin exchange becomes easier.

The stablecoin rollout aligns with broader legislative efforts. The Democratic Party is advancing the Digital Asset Basic Act to define and regulate digital assets, including stablecoins. This law is expected to set the foundation for how these tokens can be issued, who can manage them, and what level of transparency is required. Some banks, like KB Kookmin, have already filed trademarks for names such as KBKRW and KRWST, indicating that development is well underway. Legal reviews and compliance checks are still in progress, but if everything stays on schedule, pilots could begin in late 2025.

South Korea is not the only country exploring this route. Japan is rolling out bank-backed stablecoins under its own regulatory framework, and Europe is moving forward under MiCA. What sets South Korea apart is the scale and speed of coordination between major banks. By moving together, they hope to launch something trusted, regulated, and fully backed by Korean financial institutions.

The success of this stablecoin will depend on how it’s received by users and how effectively regulators and banks handle its launch. What is clear is that South Korea is preparing to take a more active role in how digital money works inside its borders. The initiative signifies a pivotal shift towards local stablecoin dominance, potentially reducing dependency on USD-backed tokens and impacting markets. The involvement of major banks indicates substantial capital backing and a commitment to fostering local blockchain advancements.