South Korea’s first Korean won-backed stablecoin was recently launched in a test run by fanC in collaboration with financial software firm Initech. Could this be the start of Korea’s stablecoin bid?
Summary
- fanC and Initech have launched the first Korean won-backed stablecoin pilot.
- Major fintech and crypto-related firms in South Korea have been gearing up to be the first to publicly launch the first Korean won-pegged stablecoin.
On August 5, fanC and Initech unveiled “KRWIN,” the first stablecoin pegged on a 1:1 ratio to the Korean won. This marks the first time a private entity has issued a won-based digital asset in the nation. As reported by the Korean Herald, the pilot was designed to test out KRWIN’s technical feasibility, including transferability and real-world applications.
Although no official release date has been announced for the stablecoin, the report stated that the won-based token will be distributed across various sectors including payment firms, global remittances, tourism and more.
For now, circulation of the token will be limited to internal groups consisting of entities affiliated with fanC and Initech.
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A spokesperson for fanC, Lee Dong-ho, said that the test issuance of the Korean won-backed stablecoin marks a major milestone in advancing the adoption of stablecoins in the nation. The test is said to combine financial security with blockchain technology.
“KRWIN will establish itself as a leading private model driving future demand for won-denominated digital assets,” said Lee in his statement.
Just a month ago, fanC already filed for a trademark on KRWIN and associated technologies with the Korean Intellectual Property Office, signaling that the firm is already preparing its stablecoin for a public launch in the near-future.
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The race to launch South Korea’s first won-backed stablecoin
Following the ongoing global stablecoin race, major South Korean financial institutions have been eyeing the possibility of a Korean won-pegged stablecoin. The race was spurred on by comments from the newly elected President Lee Jae-myung, who pledged to allow cryptocurrency assets backed by the won.
His commitment to support Korean won-backed assets have triggered a spike in interest among retail investors in companies associated with digital currency projects to pivot into the stablecoin business.
Aside from fanC and Initech, officials from crypto exchange Bithumb and fintech firm Viva Republica, operator of the mobile app Toss said that they are currently in talks of establishing a partnership in the stablecoin business, according to the Korea Herald.
Not only that, South Korea’s largest crypto exchange, Upbit, and fintech payment platform Naverpay have also partnered up to issue stablecoins backed by the national currency. However, further details have not been revealed as of late.
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Resistance from the Bank of Korea
In mid-May, South Korea’s central bank issued a statement saying it should be given authority to monitor the approval of won-based stablecoins. In a previous report, officials express concern over stablecoins being used as legal tender.
According to the Bank of Korea, if not regulated correctly, stablecoins could could disrupt monetary policy if it is treated like legal tender. Therefore, it needs to be under the BOK’s supervision.
The growing interest in Korean won-backed stablecoins is no surprise considering the population has already taken well to USD-backed stablecoins. As previously reported by crypto.news, the Democratic Party revealed that stablecoins made up almost half as users move funds to overseas exchanges.
At the time, Korea’s cryptocurrency outflow almost reached 57 trillion won in the first quarter of 2025.
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