South Korea’s Top 8 Banks Unite to Launch Won-Backed Stablecoin in 2025

South Korea’s top 8 banks are set to launch a won-pegged stablecoin, a big move in the country’s digital finance strategy.

Written by: Arslan Butt • Wednesday, June 25, 2025 • 2 min read

• Last updated: Wednesday, June 25, 2025

Quick overview

South Korea's top 8 banks are launching a won-pegged stablecoin to enhance digital finance and reduce reliance on dollar stablecoins.
The project will test two models: a trust-based model using blockchain frameworks and a deposit-linked model backed by fiat deposits.
The initiative aims to strengthen South Korea's financial sovereignty and position the country as a leader in blockchain finance.
The Bank of Korea advocates for a slow and controlled rollout to ensure financial stability and thorough risk assessment.

South Korea’s top 8 banks are set to launch a won-pegged stablecoin, a big move in the country’s digital finance strategy. The project, led by Open Blockchain and DID Association and Financial Settlement Institute, is a consortium to create digital payment alternatives to traditional banking systems.

The project will test two models for the stablecoin:

Trust-based model – built on blockchain trust frameworks
Deposit-linked model – backed by fiat deposits

This comes after South Korea’s Democratic Party proposed the Digital Asset Basic Act, a crypto legislative reform expected to give legal clarity to stablecoins. The law is still under debate and will allow regulated use of digital tokens pegged to fiat currencies, further fueling innovation in domestic financial markets.

Kaia DLT Foundation Chairman Sam Seo said a won-backed stablecoin can be an efficient alternative to currency exchange or wire transfer, making cross-border and domestic digital transactions smoother.

Responding to Dollar Coin Dominance

The consortium is partly motivated by the growing concern about dollar stablecoins dominating global and domestic transactions. A bank representative involved in the project said:

“If dollar stablecoins continue to dominate, South Korea’s financial independence is at risk.”

By launching a native digital currency, South Korea wants to protect its financial sovereignty and be competitive in the digital asset space. The project will position the country as a regional leader in blockchain finance and offer local users a familiar, regulatory compliant digital option.

Objectives of the stablecoin project:

Reduce reliance on US dollar coins
Enhance domestic digital payment systems
Foster innovation in blockchain finance
Strengthen national financial security

Central Bank Wants Slow and Controlled Rollout

While the banks are moving fast, the Bank of Korea is urging a slow and phased rollout of the won-pegged stablecoin. Senior Deputy Governor Ryoo Sang-dai said commercial banks already under strict regulation should be the first issuers before expanding to non-bank institutions.

He added that any rollout should not have unintended consequences for monetary policy or financial stability and the design and issuance process should be accompanied by thorough risk assessment.

This is in line with the global trend where central banks are exploring stablecoins but prioritizing systemic safety, oversight and integration into existing financial frameworks.

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ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.