South Korea’s Financial Sector Accelerates Stablecoin Development: Are the Regulations Ready to Keep Up?

TLDR

• South Korea’s major banks join tech firms like Naver and Samsung to develop won-pegged stablecoin systems.
• Stablecoin transaction volumes in South Korea have already exceeded $41 billion nationwide.
• Woori expands Samsung Wallet partnership and holds stake in KRW1 stablecoin issuer BDACS.
• The Financial Services Commission plans to submit South Korea’s first stablecoin bill soon.
• The new law will ban yield-earning stablecoins, aligning with U.S. GENIUS Act restrictions.

South Korea’s biggest financial institutions are entering a new phase of digital transformation as they rush to develop stablecoins tied to the Korean won. The initiative comes amid growing collaborations with major technology firms and ahead of a forthcoming regulatory framework that will define how such digital assets can be issued and managed.

Major Banks Form Alliances with Tech Giants

KB Financial Group, Shinhan Financial Group, Hana Financial Group, and Woori Financial Group have entered new partnerships with leading technology companies, including Naver, Kakao, and Samsung Electronics. The collaborations focus on building systems that will allow banks to issue and manage stablecoins.

Industry officials confirmed that these partnerships aim to combine banks’ financial expertise with the technological capabilities of major platforms. They emphasized that technology firms already possess extensive digital ecosystems capable of supporting real-world use once stablecoins enter circulation.

South Korea Expanding Roles in the Digital Asset Market

Although stablecoins are not yet recognized as legal payment tools, domestic transaction volumes have already surpassed $41 billion. This growth has pushed traditional banks to accelerate the development of their digital currency infrastructure. Woori Financial Group has expanded its existing partnership with Samsung Electronics, specifically through Samsung Wallet, which can facilitate digital currency operations.

Additionally, Woori holds a 5% stake in BDACS, the digital asset custody firm that introduced the KRW-pegged stablecoin KRW1 in September during a joint proof-of-concept trial with Woori Bank. Meanwhile, KB, Shinhan, and Hana have established cooperative projects with Naver and are exploring opportunities with Dunamu, the operator of South Korea’s largest cryptocurrency exchange, Upbit.

Regulatory Framework Nears Completion

The Financial Services Commission is preparing to submit a stablecoin-focused bill to the National Assembly by year-end. Referred to as the second phase of South Korea’s cryptocurrency legislation, the proposal seeks to define issuance rules and operational guidelines for institutions managing won-backed tokens.

Chairman Lee Eok-Won stated in October that the draft law will prohibit stablecoin holders from earning yield on their tokens, aligning with similar restrictions introduced under the U.S. GENIUS Act. Once enacted, the legislation will establish South Korea’s first clear legal basis for stablecoin issuance, paving the way for regulated digital currency operations across major financial groups.