South Korea's National Bank joins hands with eight peers to establish a stable currency joint venture, and the central bank puts the brakes on: prudence is the priority

Under the policy guidance of South Korean President Lee Jae-myung, the Korean won stablecoin is gradually emerging. Eight major banks, including KB National Bank, have successively applied for stablecoin trademarks and formed an alliance, preparing to enter the crypto market. However, the Bank of Korea remains relatively conservative, concerned about capital outflow and financial stability issues, and is actively promoting CBDC as a counterbalancing tool. KB National Bank, South Korea's largest commercial bank, recently submitted 17 stablecoin-related trademark applications, including token codes like "KBKRW, KRWKB, and KBST", covering virtual currency trading software and blockchain applications. According to KB's statement to local media Aju Economic News, this is a "pre-emptive deployment" for the upcoming stablecoin alliance. The alliance members include Shinhan, Woori, Agricultural Cooperative, IBK, Water Cooperative, Citibank Korea, and Standard Chartered Korea, with four of these being among the top four banks in South Korea's market share. Another local media, Econovill, pointed out that these eight banks are preparing to establish a joint venture to issue a won-based stablecoin. The alliance is collaborating with South Korea's blockchain initiative organization OBDIA and payment clearing institution KFTC, with plans to officially launch between late 2025 and early 2026. This move echoes KakaoPay's simultaneous application, indicating that a Korean won stablecoin race has quietly begun. In contrast to the banking industry's proactive attitude, Bank of Korea (BOK) Deputy Governor Ryoo Sangdai stated at a press conference that stablecoins should be first issued by the most strictly regulated banks and gradually expand to other institutions. A safety net must be established to avoid market volatility and consumer harm. BOK Governor Lee Chang-yong added that while not opposing the concept of a Korean won stablecoin, he remains cautious about foreign exchange management and cross-border capital flows. Ryoo Sangdai questioned the necessity of issuing a Korean won stablecoin and expressed concerns about potential capital outflow, impact on foreign exchange policy, and pressure on the local financial system. Last week, the South Korean government introduced a draft Digital Assets Basic Law, allowing companies with capital over 500 million won (approximately $368,000) to issue stablecoins with a license. Facing the rise of private stablecoins, the Bank of Korea seems more interested in Central Bank Digital Currency (CBDC). Currently, BOK is participating in Project Agora led by the Bank for International Settlements and promoting the "Project Hangang" test program domestically. BOK stated that the next stage of testing will depend on stablecoin-related legislation progress and will be coordinated with major banks. Central bank officials also revealed plans to seek expanded regulatory authority over non-bank institutions at the upcoming presidential policy planning committee. As private financial institutions collaborate to promote stablecoin development, South Korea continues to accelerate in the Asian digital currency race. However, the central bank's cautious stance and potential regulatory barriers add variables to this transformation. Whether South Korea can successfully build a domestic stablecoin ecosystem remains to be seen. Risk Warning: Cryptocurrency investment carries high risk, with potentially extreme price volatility. You may lose all your principal. Please carefully assess the risks.