South Korea Tests Stablecoin Pegged to Won

South Korea's KBFG completes stablecoin proof-of-concept phase.

South Korea’s KB Financial Group (KBFG) has completed the proof-of-concept phase for a stablecoin pegged to the won. KBFG tested a full cycle of financial services based on the asset, reports Yonhap.

The pilot involved payment operator KG Inicis, blockchain platform Kaia, and fintech company OpenAsset. 

During the pilot, KBFG examined several use cases for the asset:

• Cross-border transfers: the won-based stablecoin was converted into a dollar equivalent through Kaia’s on-chain liquidity and sent to a bank account in Vietnam. The operation took less than three minutes, with fees 87% lower than the SWIFT system;
• Offline payments: payments via QR code were tested in Hollys coffee shops without using a separate crypto wallet. On the backend, the transaction was automatically executed through a smart contract.

Developers focused on transferring the internal settlement infrastructure to blockchain while maintaining the usual user experience. They emphasized that it was not a separate service but an integrated system.

KB Kookmin (part of KBFG) is the largest bank in the country with assets exceeding 584.9 trillion won (~$424 billion). 

Group representatives stressed their readiness to launch commercial tools as soon as the regulatory framework is established. The adoption of a digital assets law in South Korea is delayed due to disagreements between the central bank and the Financial Services Commission regarding the issuance rules for “stablecoins.”

In April, Bank of Korea Governor Hyun Song Shin announced plans to expand the use of CBDC and deposit tokens. According to him, this is necessary to adapt the monetary system to digital transformation.