Key Insights:
- The Bank of Korea is planning to launch a won-denominated stablecoin through regulated commercial banks..
- Eight major South Korean commercial banks are collaborating in this initiative.
- At the same time, the Bank of Korea is pushing forward with its own CBDC as a direct countermeasure to private stablecoins.
South Korea is preparing to embrace stablecoins, according to reports.
The country’s central bank, the Bank of Korea (BOK), recently announced intentions to roll out a new won-denominated stablecoin, which will start with regulated commercial banks. This is a major step towards integrating digital assets into mainstream finance, and here’s an unpacking of what this all means for South Korea’s future.
Stablecoins Through the Banks First
At a recent press conference, Ryoo Sang-dai, Deputy Governor of the Bank of Korea, pointed out the importance of the roll out, and why caution is important. He proposed that regulated commercial banks should be the first to issue stablecoins.
According to Ryoo, this approach provides a safety net and removes the risks associated with consumer protection and financial instability.
“It would be desirable to initially allow stablecoin issuance primarily through banks, which are subject to higher levels of financial regulation,” Ryoo stated. “And gradually expand it to the non-banking sector.”
Despite the roll out though, the BOK is still wary of digital assets. One of its biggest issues is the possibility of stablecoins accelerating capital outflows.
Ryoo warned that if these outflows happen, they could undermine South Korea’s foreign exchange policies and threaten its financial sovereignty.
Stablecoins could also affect how South Korea manages its currency on the international stage. If something goes wrong, exchange rate stability is likely to suffer and the BOK will find it harder to regulate capital movement in and out of the country.
8 Commercial Banks Take the Lead
In line with the BOK’s proposal, eight of South Korea’s largest commercial banks have come together to issue a won-backed stablecoin.
This stands as the first time that private banks are entering the stablecoin space. Some of the participating banks include KB Kookmin, Shinhan, Woori, Nonghyup, Industrial Bank of Korea, Suhyup, Citibank Korea and SC First Bank.
Major move in South Korea!
8 top banks are teaming up to launch a Korean Won stablecoin
Two issuance models on the table:
Launch could happen by year-end
— SWFT Blockchain (@SwftCoin) June 25, 2025
These banks are also partnering with the Open Blockchain and DID Association and the Financial Supervisory Service. While details are still scarce, the cooperation is expected to launch either later this year or in early 2026.
Two Models of Stablecoin Issuance
This bank consortium is working on two separate models for issuing this won-pegged stablecoin.
The first is the Trust-Based Model, in which coins are issued after customer funds are securely placed in a trust. This creates a layer of separation and security, which can help protect user funds in case of institutional failure.
The other is the Deposit-Linked Model, where stablecoins are issued in a 1:1 ratio with existing bank deposits. This is similar to how some U.S.-based stablecoins function, and may be the better choice due to its better liquidity and ease of access.
In all, both models are being designed with regulatory compliance and user protection in mind.
CBDCs as a Counterweight for Stablecoins
While commercial banks are working on stablecoins, the Bank of Korea is pushing ahead with its own CBDC.
Ryoo noted that the BOK sees CBDCs as a necessary countermeasure to private stablecoins. This is especially when it comes to maintaining state oversight over monetary supply and currency stability.
A pilot program for the CBDC, is currently being developed with input from several government agencies. These include the Financial Services Commission and the Financial Supervisory Service.
In addition, it is set to conclude on June 30, with a second round of testing depending on feedback from the banking sector.
Unlike the private bank-led stablecoins, the CBDC is expected to be directly managed by the central bank. Besides, they could serve as the foundation for public sector digital payments and cross-border transactions.
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