- Seven major Korean banks have formed a joint venture to develop stablecoins.
- Hana Bank recently joined the project, filing a stablecoin trademark application.
- The banks will use shared infrastructure but will create their own individual tokens.
- Participating banks are also involved in Project Hangang, which tests tokenized bank deposits with the central bank.
- The central bank supports stablecoin projects led by banks, citing tight financial regulation.
Seven leading banks in South Korea have joined together to develop stablecoins following a project announcement in April. Hana Bank recently joined the group after filing a trademark application, as reported by Aju Economy. The banks are working with the Open Blockchain and DID Alliance to coordinate the effort.
Initial consortium members include KB Kookmin, Shinhan, Woori, NH Nonghyup, IBK Industrial, and SH Suhyup. New additions such as iM Bank and K Bank have joined, with speculation that Citi Korea and Standard Chartered Korea may participate. KB Kookmin has also filed for a stablecoin trademark, indicating plans for separate tokens by each bank despite shared infrastructure.
According to trademark filings, the joint project’s technology will be common, but each bank will issue its own distinct stablecoin. The stablecoin initiative began shortly after the launch of Project Hangang, a tokenized deposit program involving the same banks. This program uses a wholesale central bank digital currency (CBDC) — a digital asset backed by the central bank — for settling transactions between banks. The first round of these trials is wrapping up, with no official decision yet on when the second round will start. During a recent press conference, Bank of Korea Deputy Governor Yoo Sang-dae stated, “That’s not necessarily true,” when asked if further testing would be postponed pending stablecoin regulatory changes, as cited in Yonhap News.
Differences between tokenized deposits and stablecoins were also noted. Tokenized deposits are based on customers’ bank balances and backed by bank reserves, while stablecoins rely on separate, designated asset pools with varying rules depending on local regulations.
At the conference, Yoo explained that the central bank once believed tokenized deposits could perform the same function as stablecoins but noted that stablecoins could also drive financial innovation. He added that “the dollar’s dominance stems from its role as a safe-haven asset, not from the medium through which its value is transmitted,” according to Chosun Daily. Yoo pointed out that even with a new stablecoin tied to the Korean won, most users would still prefer dollar-based digital currencies.
The central bank remains cautious about stablecoins due to existing capital control regulations in South Korea. The government plans to let startups launch stablecoins on a limited basis, but the central bank prefers to see banks take the lead in these projects. Yoo stated, “It is desirable to first allow stablecoin issuance centered on banks with a high level of financial regulation and gradually expand it to the non-banking sector.”
Recent developments indicate that the Bank of Korea may explore using public, permissionless blockchain networks in future digital currency projects, reflecting the country’s fast-moving digital asset landscape.
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