KakaoBank is gearing up to dive into South Korea’s burgeoning stablecoin sector, as the digital currency landscape in the country takes a dramatic turn. In a recent earnings call, Kwon Tae-hoon, the bank’s CFO, revealed that KakaoBank is “actively considering” roles in both issuing and safeguarding stablecoins, aligning its strategy with the nation’s evolving digital asset policies. This comes on the heels of the Bank of Korea’s decision to halt its central bank digital currency (CBDC) pilot in June—a move that has sparked a flurry of activity in the local fintech scene.
A New Contender in the Stablecoin Arena
KakaoBank’s strategic pivot is a notable development in South Korea’s financial sector, which has seen a growing interest in digital currencies. The bank, which is part of a larger Kakao ecosystem that includes KakaoPay, is tapping into its technological prowess honed during the now-defunct CBDC pilot. “We built and operated wallets, handled exchanges and transfers,” Kwon noted, emphasizing their hands-on experience that many competitors lack. He also mentioned the bank’s three-year track record in issuing real-name accounts for crypto exchanges, highlighting their regulatory readiness for the compliance challenges that come with fiat-pegged tokens.
The move places KakaoBank among other Korean fintechs racing to seize the stablecoin market, a trend gaining momentum after President Lee Jae-myung’s administration introduced legislation to facilitate local stablecoin issuance. This legislative shift opens the door for regulated banks like KakaoBank to explore new revenue streams and solidify their position in the digital finance world.
The Ripple Effect in the Market
KakaoBank’s entry into the stablecoin sector is not happening in a vacuum. It’s part of a broader wave of interest in stablecoins, not just in South Korea but across Asia. In Hong Kong, local firms are also eyeing stablecoin issuance licenses following a lukewarm reception to the People’s Bank of China’s CBDC. As detailed in our coverage of Hong Kong’s stablecoin licensing regime, the city aims to position itself as a global hub for digital currencies. As Circle, a prominent player in the stablecoin market, went public in June, it became the top foreign equity purchased by Korean retail investors—an indication of growing retail enthusiasm for digital currencies.
This fervor is further fueled by KakaoBank’s participation in a weekly stablecoin-focused task force within the Kakao group. Key figures like CEOs Chung Shin-ah (Kakao), Shin Won-keun (KakaoPay), and Yoon Ho-young (KakaoBank) are spearheading the initiative, ensuring that the group is well-positioned to capitalize on market changes.
A Glimpse into the Future
While KakaoBank’s foray into stablecoins presents exciting opportunities, it also raises questions about the long-term viability of such ventures. The bank’s technical readiness and compliance track record are certainly advantages, but the regulatory landscape remains fluid. As more players enter the stablecoin arena, competition will intensify, potentially squeezing margins and making it harder for newcomers to stand out. For insights into how China might re-engage with crypto, including stablecoins, see our analysis of Hashkey CEO’s predictions.
Moreover, the global interest in stablecoins could attract scrutiny from international regulators, adding another layer of complexity to the equation. It’s a dynamic, rapidly evolving sector, and while KakaoBank seems well-prepared, the road ahead is anything but certain.
In the coming months, all eyes will be on KakaoBank and its counterparts, as they navigate the challenges and opportunities in South Korea’s digital currency market. Will they emerge as leaders in the stablecoin space, or will unforeseen hurdles derail their ambitions? Only time will tell. But one thing’s for sure—KakaoBank’s bold move has set the stage for an intriguing chapter in the world of digital finance.
Source
This article is based on: With South Korea’s CBDC Plans Dead, KakaoBank Joins Stablecoin Gold Rush
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
