South Korea's 8 Banks to Launch Won Stablecoin

South Korea's Banking Consortium to Launch Won-Based Stablecoin

Eight major South Korean commercial banks are collaborating to launch a stablecoin pegged to the South Korean won (KRW). This initiative marks a significant development in the country's digital finance sector, paving the way for wider adoption of digital assets. The Bank of Korea (BOK), while supportive, is also developing its own Central Bank Digital Currency (CBDC) as a countermeasure.

Key Players and Models

The participating banks include industry giants such as KB Kookmin Bank, Shinhan Bank, Woori Bank, Nonghyup Bank, Industrial Bank of Korea, Suhyup Bank, Citibank Korea, and SC First Bank. This consortium is exploring two distinct stablecoin issuance models:

• Trust-Based Model: Customer funds are held in trust, providing a layer of security in case of institutional failure.
• Deposit-Linked Model: Stablecoins are issued in a 1:1 ratio with existing bank deposits, offering better liquidity and accessibility.

The launch is anticipated later this year or early 2026, pending regulatory approvals. The banks are working in collaboration with the Open Blockchain and DID Association and the Financial Supervisory Service.

Bank of Korea's CBDC Strategy

The BOK's development of a CBDC serves as a parallel effort to regulate and control the private stablecoin market. Deputy Governor Ryoo Sang-dai emphasized the importance of initially limiting stablecoin issuance to regulated entities to mitigate risks associated with consumer protection and financial stability. The BOK's CBDC is seen as a crucial tool in maintaining oversight of monetary supply and exchange rate stability.

Concerns and Considerations

While promoting innovation, the BOK remains cautious about the potential negative impacts of stablecoins. Key concerns include the risk of accelerating capital outflows, which could undermine South Korea's foreign exchange policies and financial sovereignty. The BOK aims to balance the benefits of stablecoins with the need for robust regulatory frameworks.

Codeum's Role in Blockchain Security

The development and deployment of stablecoins necessitate robust security measures. Codeum, a leading blockchain security and development platform, offers a range of services critical for projects like this, including:

• Smart contract audits
• KYC verification
• Custom smart contract and DApp development
• Tokenomics and security consultation
• Partnerships with launchpads and crypto agencies

Codeum helps ensure the security and transparency of blockchain projects, minimizing vulnerabilities and promoting trust within the ecosystem. This is crucial for the successful and secure launch of any stablecoin project.