Eight major South Korean banks are collaborating to launch a stablecoin backed by the Korean won by late 2025 or early 2026. This initiative is aimed at addressing the increasing dominance of dollar-pegged stablecoins in the global market. Institutions involved in this project include KB Kookmin, Shinhan, Woori, Nonghyup, Corporate, Suhyup, Citi Korea, and SC First Bank. Despite the rapid expansion of stablecoins, which constitute a market capitalization of over $239 billion, a staggering 99% are pegged to the US dollar. The stablecoin will adopt a trust-based model or a 1:1 deposit token scheme, pending regulatory approval. This move aligns with broader legislative efforts in South Korea, including the proposed Digital Asset Basic Act, which seeks to facilitate stablecoin issuance and bolster the country's crypto markets. However, concerns have been raised by officials, such as Bank of Korea Governor Rhee Chang-yong, regarding potential challenges in managing monetary policy due to the new stablecoin giving holders an easier avenue for exchanging won for dollars.

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