Eight major banks in South Korea are working on a stablecoin backed by the won, aiming to protect the currency from the growing US dollar dominance.
Eight major South Korean banks will team up to launch a stablecoin pegged to the country’s won currency, marking a significant step toward digital asset adoption.
According to an Econovill report, the project involves institutions including KB Kookmin, Shinhan, Woori, Nonghyup, Corporate, Suhyup, Citi Korea and SC First Bank. The collaboration aims to combat increased dollar dominance due to the rise of dollar-pegged stablecoins.
Data from the real-world asset (RWA) tokenization tracker RWA.xyz shows that stablecoins have a market capitalization of over $239 billion. The data also shows that 99% of the stablecoins issued are pegged to the US dollar.
With the project, the banks aim to put South Korea in a position to compete in the global digital finance market.
Stablecoin project expected to launch in 2025 or early 2026
The project is reportedly expected to materialize in late 2025 or early 2026. According to Econovill, this project is the first big move from traditional banks to enter the digital asset space.
The blockchain-focused nonprofit Open Blockchain and the Decentralized Identity Association expressed support for the project. It will also be supported by the Korea Financial Telecommunications and Clearings Institute.
The report also noted that the stablecoin will adopt a trust-based model or a 1:1 deposit token scheme, which is still subject to regulatory approval.
The stablecoin initiative aligns with a broader legislative push to build a clear regulatory structure for digital assets in South Korea.
On June 10, South Korea’s ruling party proposed the Digital Asset Basic Act to allow stablecoin issuance and boost the growth of crypto markets in the country.
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South Korea’s central bank head expects potential issues
Following the development, Bank of Korea Governor Rhee Chang-yong expressed concerns that creating the stablecoin could make it easier for holders to exchange the currency for the dollar.
The official said this could hurt the currency, making it difficult for the central bank to manage. However, the country’s central bank head said he wasn’t against issuing a won-pegged stablecoin.
Meanwhile, the Bank of Korea Deputy Governor Ryoo Sangdai later said the rollout for won-pegged stablecoins should be gradual. The official said banks should be the first entities to issue them to ensure a safety net.
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