[K-Tech] South Korea's fintech giants gear up for stablecoin battle

SEOUL, August 7 (AJP) - South Korean fintech companies are forming dedicated task forces and ramping up preparations as expectations mount for the introduction of won-backed stablecoins in the country.

Stablecoins, digital tokens typically pegged to fiat currencies like the U.S. dollar or euro, have gained traction globally for their potential to enable faster, lower-cost transactions while promising greater price stability.

Following the fintech sector's growing interest in cryptocurrency, mobile financial services provider Toss, operated by Viva Republica, has recently established a stablecoin task force team to examine business opportunities in the emerging market, according to industry sources on Thursday. The task force, led by Toss chief business officer Kim Kyu-ha, includes three financial subsidiaries under the Toss umbrella.

The move follows similar actions by Kakao, which formed a group-wide stablecoin task force involving KakaoBank and KakaoPay. Both tech giants are positioning themselves ahead of potential regulatory approval for digital currencies.

The crypto boom comes as South Korea presses forward with legislative reforms aimed at modernizing digital asset oversight — a key campaign pledge of President Lee Jae Myung.

While South Korea's central bank and the Bank for International Settlements have raised fresh alarms over the systemic risks posed by the rapid rise of stablecoins, fintech giants are in preparation as stablecoins provide faster and cheaper transactions while mitigating the volatility often associated with cryptocurrencies like Bitcoin or Ethereum.

Naver Pay has also signaled its intentions, with CEO Park Sang-jin saying in June 26 that the company is "well-positioned to develop and implement practical use" if stablecoin regulations are introduced. Last month, Naver announced plans to collaborate with Dunamu on stablecoin business ventures.

System integration companies are also eyeing opportunities as banks, brokerages, and payment platforms would need to convert or redesign their existing payment and settlement systems for blockchain-based operations.

Digital solution provider LG CNS mirrored great interests during its second quarter results briefing, its chief account officer Kim Hong-geun announcing that " we are strategically responding to stablecoin business opportunities."

Kim Dong-young davekim0807@ajupress.com