On June 25th, according to the Korean Economic Review, eight top commercial banks in South Korea are collaborating to establish a joint venture with the goal of issuing a stablecoin pegged to the Korean won (KRW). This move aims to counterbalance the dominance of USD-linked stablecoins in the global market, while also demonstrating proactive efforts to gain a position in the rapidly developing digital asset field.
The eight banks participating in the joint venture include: Kookmin Bank, Shinhan Bank, Woori Bank, Nonghyup Bank, Industrial Bank of Korea (IBK), Fisheries Cooperative Bank, Citibank Korea, and Standard Chartered First Bank Korea. These banks are collaborating with the Open Blockchain and Decentralized Identity (DID) Association, as well as the Korea Financial Payment Institute, to promote the process of building and issuing a stablecoin linked to the won.
This is the first time the Korean banking sector has joined forces to enter the digital asset field through an alliance model, which is seen as a clear signal that the private sector is proactively responding to the emergence of blockchain technology and digital assets. This initiative aims not only to promote financial innovation but also to reinforce national monetary sovereignty in a context where USD stablecoins dominate most of the global market.
Currently, the banks are in the process of negotiating the construction of a shared infrastructure for the joint venture. It is expected that after completing the related legal framework, the official establishment of the joint venture could be implemented as early as the end of this year or the beginning of 2026.
Regarding the stablecoin issuance model, a final approach has not yet been chosen. Two options are being considered from both technical and legal perspectives, including:
Trust Model: issuing tokens based on funds entrusted to the bank by customers;
Deposit Token Model: issuing tokens at a 1:1 ratio with actual bank deposits.
Implementing a domestic stablecoin will not only pave the way for a more transparent and secure digital financial ecosystem in South Korea but also create opportunities for traditional banks to affirm their role in the decentralized financial era. This could also be a premise for South Korea to become a pioneering nation in large-scale domestic stablecoin development.
