In a bold move that could reshape South Korea’s financial landscape, eight major banks are joining forces to launch a won-based stablecoin. This ambitious project represents a significant step toward integrating traditional banking with blockchain innovation.
Why are South Korean banks launching a stablecoin?
The participating institutions – including KB Kookmin, Shinhan, and Woori – aim to create a digital currency pegged to the Korean won. This initiative comes as global interest in stablecoins grows, with potential benefits including:
- Faster cross-border transactions
- Reduced settlement times
- Improved financial inclusion
- Enhanced regulatory oversight
How will the joint venture approach blockchain integration?
The banks are working with two key partners:
| Organization | Role |
|---|---|
| Open Blockchain & Decentralized Identifier Association (OBDIA) | Blockchain infrastructure |
| Korea Financial Telecommunications & Clearings Institute (KFTC) | Regulatory compliance |
What regulatory developments could impact the stablecoin launch?
The project’s timeline depends on several factors:
- Approval of the trust-based or deposit-token model
- Clarification of digital asset regulations
- Interbank cooperation agreements
When can we expect this won-based stablecoin?
Industry observers predict a potential launch window between late 2024 and early 2025. The exact timing will depend on how quickly regulatory hurdles are cleared and technical infrastructure is finalized.
Frequently Asked Questions
Which South Korean banks are involved in the stablecoin project?
Eight institutions: KB Kookmin, Shinhan, Woori, NongHyup, Industrial Bank of Korea (IBK), Suhyup, Citibank Korea and Standard Chartered Bank Korea.
What are the two issuance models under consideration?
The trust-based model holds customer funds separately before issuing stablecoins, while the deposit-token model pegs the stablecoin directly to bank deposits.
How will this stablecoin differ from existing cryptocurrencies?
Unlike volatile cryptocurrencies, this won-pegged stablecoin will maintain a 1:1 value with the Korean won, combining blockchain efficiency with traditional currency stability.
What challenges might delay the project?
Key challenges include regulatory approval, technical integration between banks, and establishing consumer trust in the new digital currency.
