South Korean crypto custodian BDACS has announced plans to issue a won-backed stablecoin, “KRW1,” on Circle’s newly launched blockchain Arc. The Busan-based company signed a memorandum of understanding (MOU) with Circle to develop and deploy KRW1 on Arc, establishing what it called an “organic cooperative framework,” according to a Wednesday report by the Yonhap News Agency.
“This collaboration is a meaningful step forward for Korea’s innovation to reach the global stage,” said Ryu Hong-yeol, CEO of BDACS. “By deploying KRW1 on Circle’s Arc, we are opening a gateway for Korean companies to participate in the global stablecoin network,” he added.
BDACS had registered the KRW1 trademark in December 2023, setting the groundwork for the stablecoin’s rollout, per the report.
Arc Testnet Goes Live
The move comes a day after Circle’s Arc launched its public testnet. In a Tuesday announcement, Circle described Arc as an “Economic Operating System for the internet,” designed to integrate global financial infrastructure directly onchain.
Arc’s testnet has already drawn participation from over 100 global institutions, including BlackRock, Goldman Sachs, Visa, Mastercard and State Street.
The network features predictable US dollar-based transaction fees, sub-second finality and optional privacy settings, allowing seamless use of both USDC and other fiat-pegged assets.
Stablecoin issuers from Japan, Brazil, Mexico, and the Philippines are already testing their own national tokens on Arc, and Korea’s KRW1 is now joining that list.
Expert Criticizes Bank-Led Stablecoin Plan in Korea
Sangmin Seo, chair of the Kaia DLT Foundation, has criticized the Bank of Korea’s (BOK) proposal for local banks to spearhead the rollout of won-backed stablecoins, calling it “illogical.”
The BOK argued that banks, being heavily regulated under capital, foreign exchange, and Anti-Money Laundering (AML) frameworks, would minimize the risks tied to introducing stablecoins. It also suggested forming a joint policy body involving currency and financial authorities to oversee issuers and issuance volumes.
However, Seo rejected the central bank’s reasoning. Instead of restricting issuance to banks, he proposed clear rules for all potential issuers, both banking and non-banking, that meet certain regulatory standards.