Eight South Korean Financial Institutions Collaborate to Create Won-Backed Stablecoin, Outlining Two Main Models

Eight prominent commercial banks in South Korea have come together to create a consortium aimed at launching a won-linked stablecoin initiative. This collaboration includes contributions from the Open Blockchain and DID Association, as well as the Financial Supervisory Service.

Announced on Wednesday by the nation’s financial sector, this joint venture represents the first instance of commercial banks engaging in the digital asset market as a consortium.

The consortium comprises eight banks: KB Kookmin, Shinhan, Woori, Nonghyup, Industrial Bank of Korea, Suhyup, Citibank Korea, and SC First Bank.

This announcement aligns with the central bank’s support for a gradual introduction of a won-backed stablecoin.

Ryoo Sang-dai, the senior deputy governor of the Bank of Korea (BOK), stated during a press conference on Tuesday that it is preferable for commercial banks to introduce won-denominated stablecoins at a measured pace.

The participation of commercial banks in stablecoin initiatives indicates that the private sector is beginning to engage with cryptocurrency more seriously. This comes at a time when the United States has established its first federal framework for dollar-pegged stablecoins through the GENIUS Act, while countries like South Korea and major corporations such as Amazon are moving towards adopting this asset class.

Banks Introduce Two Initial Models for Won-Linked Stablecoin

According to local reports, discussions regarding a shared infrastructure among the banks are currently underway. Additionally, the formation of this cooperation is expected to be revealed either later this year or early next year.

The banks have proposed an initial strategy that includes two approaches for issuing the won-backed stablecoin: trust-based and deposit-linked.

In the trust model, coins are issued after customer funds are entrusted separately, whereas in the deposit-linked model, coins are issued in a 1:1 ratio with bank deposits.

“There is a collective concern that if the situation persists, foreign dollar coins may take over the domestic market,” remarked a banking official. “It is essential to ensure both the independence and competitiveness of the domestic financial system through a won-based digital currency.”

Regulations on Stablecoins and Presidential Commitments

The current trend of bank involvement aligns with the Digital Asset Act recently proposed by South Korea’s National Assembly, which specifically mentions the establishment of a stablecoin authorization system.

Nonetheless, the Bank of Korea remains cautious regarding proposals for a won stablecoin. In contrast, newly elected President Lee Jae-myung has committed to introducing a KRW-pegged coin for business and international trade purposes.

Presidential candidate Lee Jae-myung proposes a won-backed stablecoin to stop $40.8B in crypto capital flight.#Korea #Stablecoin #LeeJaemyunghttps://t.co/qR1jwd7tXB

— Cryptonews.com (@cryptonews) May 20, 2025

His administration is swiftly working to fulfill campaign promises aimed at updating South Korea’s regulatory framework for digital assets.

The banks’ joint venture represents a private sector-driven model, contrasting with the central bank digital currency (CBDC) being developed by the Bank of Korea. While further discussions regarding its technological connections with the central bank are necessary, there are market discussions suggesting it could be expanded for various uses, including cross-border remittances and domestic payments.

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