South Korea plans to introduce a stablecoin tied to its fiat currency (Won), and big commercial banks are set to lead the effort.

On June 24, Bank of Korea Deputy Governor Ryoo Sang-dai stressed the need for strict oversight on participants. He said starting with highly regulated banks would protect the financial system and build trust. If the system proves effective, the scope of issuance could expand to non-banking institutions and fintechs.

Will Digital Won Disrupt South Korea’s Currency Controls?

Ryoo’s remarks reflect growing momentum behind South Korea’s digital currency ambitions, but also underscore deeper structural concerns.

He warned that a won-backed stablecoin could disrupt the country’s existing foreign exchange system by encouraging capital flight, loosening capital controls, and weakening the central bank’s ability to manage cross-border transactions.

According to Yonhap News, this move could disrupt South Korea’s long-standing approach to foreign exchange liberalization and increase the risk of rapid capital outflows to foreign stablecoins, such as USDT and USDC, especially during times of economic volatility.

His concerns are not just theoretical. South Korea’s largest banks are already deep into the development phase.

Wu Blockchain reports that eight top institutions are teaming up to launch a stablecoin fully backed by the Korean won on a 1:1 basis.

They are KB Kookmin, Shinhan, Woori, Nonghyup, Suhyup, Industrial Bank of Korea, Citibank Korea, and SC First Bank. The goal is to create a secure, homegrown digital currency alternative to global dollar-dominated stablecoins.
The project is being coordinated with the Open Blockchain and DID Association, as well as the Financial Settlement Institute.

Two issuance models are currently under review: a trust-based framework and a deposit-linked structure.

Both are working to back every unit of their stablecoin with full Korean won reserves. KB Kookmin Bank has already made tangible progress, filing trademark applications for its stablecoin designs, symbols, and service framework.

A report from Economic Review indicated that these efforts could culminate in a full launch by late 2025 or early 2026, pending regulatory clearance.

FX Policy Risks and Global Stablecoin Race Raise Stakes for South Korea

The growing interest in stablecoins isn’t just a local trend. It’s part of a wider global shift. In Russia, the central bank is expanding its digital ruble pilot, with plans to take it nationwide by 2026. Abu Dhabi is also making moves, rolling out a dirham-pegged stablecoin developed in collaboration with three major institutions, including IHC.

Meanwhile, Visa has partnered with African fintech firm Yellow Card Financial to promote the use of stablecoins across the continent. Major banks such as JPMorgan, Citigroup, Bank of America, and Wells Fargo are examining a joint stablecoin initiative backed by cash and U.S. Treasury reserves in the United States.

All of this is unfolding following the U.S. Senate’s approval of the GENIUS Act.

This milestone law sets national standards for stablecoins, including full reserve requirements and oversight by the Treasury. PiQ Suite has confirmed the move.

Closer to home, CoinGecko noted that South Korea’s stablecoin project aims not only to digitize the won but also to lessen the country’s dependency on foreign-issued cryptocurrencies.

As the global shift to digital currencies accelerates, South Korea faces a critical balancing act: how to embrace innovation without undermining its monetary sovereignty and economic security.