Eight South Korean Banks Launch Won-Pegged Stablecoin Initiative
Eight South Korean banks have formed a consortium to launch a won-pegged stablecoin, advancing the country's digital asset initiatives. Key details include:
- The banks involved are KB Kookmin, Shinhan, Woori, Nonghyup, Corporate Bank, Suhyup, Citi Korea, and SC First Bank.
- The initiative is supported by the Open Blockchain and Decentralized Identity Association and the Financial Settlement Institute.
- Two models will be introduced: one based on trust and another linked to deposits, both pegged 1:1 to the Korean won.
- The move aims to reduce the dominance of dollar-pegged stablecoins, which represent 99% of the market with over $239 billion in capitalization.
- The stablecoin is expected to launch between late 2025 and early 2026, positioning Korea among the first developed nations with a bank-backed stablecoin ecosystem.
The Bank of Korea has expressed caution regarding the initiative. Concerns include potential impacts on currency management and systemic risks associated with stablecoin issuance. The central bank favors a gradual approach, initially allowing banks to issue stablecoins.
Additionally, global developments include the recent passage of the GENIUS Act in the US Senate, aimed at regulating stablecoins through reserve backing and tiered oversight, which may influence stablecoin policies worldwide.