South Korea KakaoBank Pushes Its Planned Korean Won Stablecoin Into Development

TLDR

Table of Contents

KakaoBank has started developing a KRW-pegged stablecoin, according to new job postings.
KakaoPay applied for several KRW-based stablecoin ticker symbols in June.
KakaoPay and NaverPay both target digital finance growth through stablecoins.
Regulatory challenges from the Bank of Korea complicate local stablecoin efforts.

KakaoBank, the digital banking arm of South Korea’s tech giant Kakao, has reportedly moved forward with the development of a stablecoin pegged to the Korean won (KRW). This advancement was confirmed through recent updates on the bank’s official website, which listed new positions for blockchain service backend developers. These roles indicate that the bank is focusing on developing the necessary infrastructure for a stablecoin that can be integrated into the country’s growing digital finance ecosystem.

The move is seen as a significant step in KakaoBank’s broader strategy to integrate digital assets and blockchain technologies into its offerings. It also comes at a time when South Korea is making efforts to create a stablecoin market for the Korean won, aiming to ensure monetary sovereignty amid the global dominance of US dollar-pegged stablecoins.

Recruitment Efforts and Development Focus

KakaoBank’s recruitment listings reveal that the bank is specifically looking for blockchain experts with skills in smart contracts, token standards, and full node management. The job postings suggest that KakaoBank is preparing to build a robust backend system to support the issuance and transaction of its stablecoin. The development team will likely focus on building the technical framework necessary to ensure the stablecoin’s success in the market.

Previously, KakaoBank’s Chief Financial Officer, Kwon Tae-hoon, mentioned in an earnings call that the bank was exploring several options to participate in the digital finance space, including the issuance or custody of digital assets. This aligns with KakaoBank’s growing interest in incorporating blockchain and digital currency technologies into its business model.

KakaoPay’s Stablecoin Ticker Applications

In addition to KakaoBank’s developments, KakaoPay, the payments subsidiary of Kakao, has already made moves in the stablecoin space. In June, KakaoPay filed several copyright applications for ticker symbols related to a potential KRW-pegged stablecoin.

These ticker names, which include PKRW, KKRW, and KRWP, suggest that the company is laying the groundwork for the launch of a stablecoin that could be integrated into its existing payment platform.

This application for ticker symbols underscores KakaoPay’s ambition to become a major player in South Korea’s digital finance sector. The company already boasts a large user base, with around 42 million members and an average of 24 million monthly active users. This gives KakaoPay an edge in leveraging its existing platform to promote the adoption of a KRW-based stablecoin among South Korean consumers.

Naver’s Rival Stablecoin Initiative

KakaoBank’s stablecoin project is not the only one of its kind in South Korea. Naver, another tech giant, is also exploring stablecoin offerings. Naver is reportedly developing a wallet service for a local stablecoin project in Busan.

Naver Financial, the company’s fintech division, is also in the process of merging with Upbit, South Korea’s largest cryptocurrency exchange. This merger could strengthen Naver’s position in the digital finance sector.

Like Kakao, Naver also has a well-established payment platform, NaverPay, which is used by millions of people across South Korea. With a user base of over 30 million, NaverPay is poised to provide a similar advantage in promoting digital asset adoption, including the stablecoin offering.

Regulatory Challenges for South Korean Stablecoins

While both KakaoBank and Naver push ahead with their stablecoin initiatives, the regulatory environment in South Korea remains complex. The Bank of Korea, the country’s central bank, has insisted that only registered banks should be allowed to issue stablecoins. This stance has created a regulatory barrier for non-bank entities, like KakaoPay and Naver, that also want to participate in the stablecoin market.

Efforts to create a clear regulatory framework for stablecoins have stalled in South Korea’s legislature. Despite this, both Kakao and Naver continue to push forward with their digital finance plans, indicating a strong belief in the potential of stablecoins to drive future growth in the sector.