The South Korean digital banking giant plans a won-pegged stablecoin, aiming to capitalize on the country’s pro-crypto regulatory openness
Key Takeaways
- Asian Stablecoin Market: KakaoBank confirms stablecoin plans, exploring issuance and custody services for a won-pegged digital currency.
- South Korea’s crypto-friendly policies under President Lee Jae-myung’s rule accelerate institutional adoption.
- KakaoBank enters the race: Nine major banks are planning to launch stablecoins by 2026.
Table of Contents
The Stablecoin Market Race
The South Korean fintech arena is moving hard nowadays. KakaoBank – the Group arm of tech giant Kakao Corp. – announced this week its plans to “actively participate” in the stablecoin market, implying that it could potentially launch a won-pegged token as soon as late 2025. KakaoBank, with 25.8 million customers (roughly half of Korea’s population) and $46.5 billion in assets, may very well shape mainstream adoption of crypto.
CFO Kwon Tae-hoon shared the bank’s intentions in an earnings call, highlighting KakaoBank’s unique experience with Central Bank Digital Currency (CBDC) trials, crypto compliance like Know Your Customer (KYC) / Anti Money Laundering (AML) schemes, and methods to hold their status as a survey of experience. The project is supported by a Stablecoin Taskforce assigned by Kakao, mobilizing the respective financial, gaming (Kakao Games), and payment (Kakaopay) affiliates.
The Significance of the Stablecoin Market in the Region
Recently, the Lee administration has expedited the process to legalize stablecoins in the region, following trends across the world (like PayPal’s PYUSD). For example, banks like Kookmin Bank and fintech company fanC (which just launched KRWIN, a stablecoin pegged to the Korean won) are in a race already to take advantage of the market.
Equally, Kakao is trying to grab hold of their ecosystem from messaging on KakaoTalk to payments on KakaoPay, so they can integrate stablecoin usage as easily as a phone number. Like most cryptos, stablecoins’ use cases are not just limited to payments anymore; they serve as an entry to decentralized finance (DeFi) and tokenized assets.
Even though the market’s looking good, KakaoBank is up against some tough competition. Naver (with Dunamu) and Toss (reportedly teaming up with Bithumb) are definitely close behind.
On the profitability mark, Kakao’s Q2 earnings dipped around 6% compared to last year. That means there’s more pressure to figure out how to actually make money from stablecoins. Plus, with new stablecoin rules coming in the U.S. and EU, it could definitely impact how Korea handles its own regulations.
A Blue Ocean or a Red Wave?
KakaoBank’s intrepid move mirrors Korea’s goal of becoming a crypto hub, but in a market of 16M crypto traders, the real question will be utility, not hype.
Final Thought: Will Kakao’s stablecoin turn into the next Venmo-like marvel? Or will it sink in a sea of rivals? Too many issuers in the stablecoin market can lead to a lack of real vision.
For more stablecoin market stories, read: Tether’s U.S. Treasury Holdings Surpass South Korea
