Korean banks accelerate stablecoin preparations ahead of regulatory framework

SEOUL, August 18 (AJP) - South Korea’s four largest banks are moving to enter the stablecoin market, accelerating preparations as the government edges closer to introducing a regulatory framework for digital assets.

Stablecoins — digital tokens typically pegged to fiat currencies such as the U.S. dollar or euro — have drawn global interest for enabling faster, cheaper transactions while promising greater price stability than traditional cryptocurrencies.

Industry officials said Monday that the country’s top four banks — KB Kookmin, Shinhan, Hana and Woori — are scheduled to meet with Heath Tarbert, president of Circle Internet Group, one of the leading U.S. stablecoin issuers.

The meetings are expected to take place during Tarbert’s visit to Seoul next week. The banks have signed nondisclosure agreements preventing them from discussing details.

Talks are expected to center on distributing dollar-backed stablecoins in South Korea and exploring partnerships for developing a won-based version, according to people familiar with the matter.

The banks’ push into stablecoins comes as the government advances legislation to modernize oversight of digital assets, a priority for President Lee Jae Myung.

The Bank of Korea has repeatedly warned of the systemic risks posed by the rapid growth of stablecoins, but financial and technology companies see them as an inevitable step toward faster, lower-cost payments.

Fintech firms such as Viva Republica and Naver Pay have signaled interest in issuing stablecoins tied to the won, and LG CNS, a digital solutions provider, is reportedly considering participation as well.

Commercial banks are also stepping up their efforts.

KB set up a virtual asset response committee in June and recently made its stablecoin task force permanent.

Shinhan is testing a won-based stablecoin payment system with programmable features, such as restricting transactions to small businesses. Hana is analyzing regulatory hurdles, infrastructure requirements and use cases in cross-border payments and remittances.

Kim Dong-young davekim0807@ajupress.com