KakaoBank Signals Move into Stablecoin Market as South Korea Embraces Innovation

South Korean digital bank KakaoBank is exploring entry into the stablecoin market, considering various strategies including the launch of a won-pegged stablecoin. The initiative is supported by the Kakao Group’s internal Task Force and follows significant regulatory shifts in South Korea, presenting an opportunity for major financial institutions to innovate in this space.

Key Takeaways

KakaoBank is evaluating strategies for entering the stablecoin market, including potential issuance of a won-pegged stablecoin.
The bank has a solid foundation from previous digital asset operations, involving KYC and AML processes.
Recent trademark applications for stablecoin-related brands signal KakaoBank's serious consideration of this market.
Regulatory support in South Korea is fueling interest from several banks to create their own stablecoins.
The stablecoin market globally is experiencing significant growth, with increased institutional interest and trading activity.

KakaoBank signals entry into stablecoin market as South Korea opens the door

Main Content

KakaoBank, South Korea's digital banking sector leader, is looking to establish a foothold in the stablecoin market. The bank is reportedly assessing numerous strategies for entry, including the issuance of a stablecoin pegged to the South Korean won.

According to local reports, Kwon Tae-hoon, KakaoBank’s CFO, confirmed that the bank is evaluating various options surrounding stablecoins, emphasizing both issuance and digital asset custody services. During the bank's earnings call for the first half of 2025, Kwon expressed the bank's intention to "actively participate" in the expanding digital asset space.

This initiative is being spearheaded by an internal Stablecoin Task Force (TF) within the Kakao Group, which has leadership participation from key affiliates such as KakaoPay. Kwon highlighted that, over the past three years, KakaoBank has established real-name verified accounts for virtual asset exchanges and implemented necessary risk management measures, including Know Your Customer (KYC) and Anti-Money Laundering (AML) protocols. These initiatives create a solid foundation for the bank as it endeavors into the stablecoin sector.

In addition to these strategies, KakaoBank has been involved in the Bank of Korea's central bank digital currency (CBDC) experiment, successfully carrying out tasks such as wallet creation, asset exchanges, and remittance trials. Kwon noted that these experiences provide deeper technological and regulatory insights essential for entering the stablecoin market.

Although KakaoBank did not explicitly announce a stablecoin launch during its recent earnings call, earlier actions hint at serious contemplation of such a step. In June, the bank quietly submitted several trademark applications to the Korean Intellectual Property Office linked to potential stablecoin offerings. These applications, including brand names like BKRW and KRWB, encompass a variety of categories, including cryptocurrency transaction software, blockchain payment platforms, and digital asset-related financial services.

These filings, while not definitive evidence of a stablecoin launch, complement KakaoBank's broader interest in the digital finance arena and suggest preparatory movements on their part. A spokesperson for the bank stated that these applications were made to "proactively respond to developments in the stablecoin market."

KakaoBank’s announcement aligns with the growing interest in stablecoins within South Korea, especially following regulatory changes under President Lee Jae-myung. Since his election in June, Lee has advocated for cryptocurrency innovation and supported legislative initiatives to legalize the issuance of stablecoins tied to the Korean won.

This shift in policy has ignited a wave of interest among established financial institutions. As of now, nine leading banks in South Korea, including KakaoBank and Kookmin Bank, are either in the process of filing trademarks or conducting internal reviews for launching their own won-backed stablecoins by 2026.

Additionally, other banks are still mapping out their plans, while fintech pioneer fanC and digital infrastructure provider Initech recently introduced the first won-pegged stablecoin in South Korea, known as KRWIN. This token, backed 1:1 by the Korean won, was launched on August 5 as part of a controlled pilot phase.

Globally, stablecoins are becoming a significant topic of discussion in financial markets. Many world economies, including the U.S., China, and Japan, along with major financial entities such as Citigroup and JP Morgan, have disclosed their intentions to explore or launch their own stablecoins.

Last month, the stablecoin market capitalization reached an all-time high of $261 billion, marking the 22nd consecutive month of growth. This surge was accompanied by increased institutional adoption, on-chain utility, and rising trading volumes across centralized exchanges.