KakaoBank's Stablecoin Initiative
KakaoBank, South Korea’s leading digital bank and a significant part of the Kakao tech ecosystem, has commenced the active development of its own Korean won-pegged stablecoin. This move signifies Kakao's strong intention to be a major competitor in the nation's burgeoning digital currency landscape. The bank's commitment is evident on its official website, where it has posted job openings for blockchain backend engineers. These roles specifically require expertise in smart contracts, token standard engineering, and operating full nodes, indicating a concrete plan to construct an on-chain asset rather than just exploring a pilot program.
Previously, KakaoBank's CFO, Kwon Tae-hoon, mentioned during the H1 2025 earnings call that the bank was evaluating opportunities within digital finance, which included the potential to issue or custody digital assets. Behind the scenes, KakaoBank and other financial divisions within the Kakao Group established a task force earlier this year. This task force was formed to assess the feasibility of launching a won stablecoin and to construct a more comprehensive digital finance ecosystem.
KakaoPay, the group’s payment service, has since filed six trademark applications for potential stablecoin tickers: PKRW, KKRW, KRWP, KPKRW, KRWKP, and KRWK. These filings appear to combine Kakao or KakaoPay branding with "KRW," suggesting the exploration of multiple product concepts or branding strategies.
Investor Takeaway
Naver's Competitive Strategy
KakaoBank's initiative comes at a time when its primary competitor, Naver, is intensifying its own digital asset plans. Naver Financial is reportedly in the process of merging with Upbit, which is the largest cryptocurrency exchange in South Korea and a significant force in the Asian digital asset market. Such a substantial merger would provide Naver with immediate access to considerable liquidity, established exchange infrastructure, and a user base of millions of cryptocurrency holders.
Furthermore, Naver is developing a wallet service for a local stablecoin project in Busan, a city aiming to become South Korea's blockchain hub. NaverPay, its payment platform, boasts 30 million monthly users, which already represents more than half of the country's population. However, KakaoPay has a larger reach, with 42 million registered members and 24 million active monthly users, maintaining Kakao's dominant position in South Korea's fintech sector.
By introducing a KRW-pegged stablecoin, Kakao is creating a new on-chain financial layer for its extensive user base. The current competition is evolving into a digital asset arms race between the two dominant technology companies in Korea’s internet and mobile sphere: Kakao, through its messaging application KakaoTalk, and Naver, through its search engine and e-commerce ecosystem.
Driving Forces Behind the Tech Giant Race
The rapid acceleration in this space can be attributed to a notable shift in South Korea's political landscape. President Lee Jae Myung, elected earlier this year, has designated KRW stablecoins as a national priority. His stated objective is to safeguard monetary sovereignty and reduce reliance on dollar-backed stablecoins like USDT and USDC. However, this political momentum has encountered regulatory challenges.
Several lawmakers have introduced proposals for a local stablecoin framework, but legislative progress has been slow. Adding to the complexity, the Bank of Korea has adopted a firm stance, asserting that only registered banks, not fintech companies or exchanges, should be permitted to issue won-backed stablecoins. This position has faced opposition from industry participants, who argue that restricting issuers will hinder innovation and prevent the development of competitive, market-driven KRW stablecoins.
KakaoBank's involvement offers a potential middle ground for the government. As a fully licensed and regulated bank, it could issue a compliant, large-scale stablecoin supported by an ecosystem of 20 to 40 million users.
Investor Takeaway
Future Outlook for KakaoBank and South Korea's Stablecoin Market
With development actively underway, KakaoBank is likely preparing the necessary technical infrastructure for an on-chain KRW token. This includes the deployment of smart contracts, integration of custody solutions, and establishment of node infrastructure. Key questions now revolve around the speed of the bank's launch and whether it will proceed independently or in a consortium with KakaoPay or other subsidiaries.
The competition with Naver is set to intensify as both companies aim to leverage their extensive ecosystems:
- •Kakao will utilize the KakaoTalk messaging superapp.
- •Naver will deploy its search engine, e-commerce channels, and its potential merger with Upbit.
South Korea's race to establish stablecoins is no longer a theoretical discussion; it has become a direct contest between the nation's two largest tech giants, each commanding tens of millions of users, and a government determined to establish a sovereign digital currency alternative. The primary uncertainty remains whether legislative alignment will occur in a timely manner. However, with KakaoBank now transitioning from planning to active development, a Korean won-pegged stablecoin appears closer to actual deployment than ever before.