According to the Korean Economic Review today (25th), reported that 8 major Korean banks (including: KB National Bank, Shinhan Bank, Woori Bank...) are preparing to establish a joint venture company based on the Korean won to counter the dominant position of US dollar stablecoins and consolidate Korea's influence in the digital asset market, marking the first time Korean banks have entered the digital asset field in alliance form.
Two issuance models pending, aligning with new regulations
Currently, these banks are discussing common infrastructure, with the joint venture company expected to be established as early as the end of this year or early next year.
Regarding the stablecoin issuance method, they are evaluating two technical and legal options: a "trust-based model" where tokens are issued after customer funds are entrusted, or a "deposit token model" where tokens are issued 1:1 linked with bank deposits.
The Korean Financial Services Commission also plans to release the second-stage virtual asset systematization blueprint, including stablecoins, in the second half of the year.
Competitive Landscape and Future Outlook
The Korean financial industry is currently focused on whether this plan can bring balance to Korea's digital currency ecosystem amid competition between central bank digital currencies (CBDC), privately issued currencies, and overseas stablecoins. A banking industry professional stated:
Given the current situation, foreign US dollar stablecoins might dominate the Korean market, so it is necessary to ensure the independence and competitiveness of the domestic financial system through Korean won digital currency.
It is understood that this joint venture is privately led and belongs to a different system from the CBDC promoted by the Korean Bank, and future technical or operational cooperation with the central bank is still to be negotiated.
However, the market expects that Korean won stablecoins could be applied to overseas remittances, domestic mobile payments, and Web3 P2P financial services. Nevertheless, specific licensing methods and consumer protection mechanisms remain unclear, with institutional implementation and market trust being the primary challenges.
