Nikolas Sargeant
KakaoBank, the digital banking subsidiary of South Korean tech giant Kakao Corporation, has announced ambitious plans to enter the country's rapidly developing stablecoin market. During the company's first-half 2025 earnings call, Chief Financial Officer Kwon Tae-hoon revealed that the bank is "reviewing various methods such as issuance and custody" and intends to "actively participate" in the digital asset ecosystem. This strategic move comes as South Korea experiences a significant regulatory shift following the election of pro-crypto President Lee Jae-myung in June.
The initiative is being developed in collaboration with Kakao's dedicated Stablecoin Task Force, which includes senior leadership from key affiliates including KakaoPay. KakaoBank has already laid important groundwork for this venture, filing for stablecoin-related trademarks on June 23, the same day as competitor Kookmin Bank. The company joins eight other South Korean banks planning to launch Korean won-pegged stablecoins by 2026, positioning itself as a major player in the country's digital currency transformation.
KakaoBank brings substantial experience to the stablecoin market, having previously participated in wallet services, exchanges, and the Bank of Korea's central bank digital currency experiments. The bank has spent three years issuing real-name verified accounts for virtual asset exchanges while implementing comprehensive risk management measures including Know Your Customer and Anti-Money Laundering protocols. This operational foundation provides a solid base for expanding into stablecoin services.
With 25.86 million users representing nearly half of South Korea's population and $46.47 billion in assets under management, KakaoBank is well-positioned to capitalize on the country's growing crypto adoption. South Korean crypto exchange users have surpassed 16 million, representing over 30% of the national population, creating a substantial market opportunity. While the bank's stock price initially surged 19.3% following its trademark filings, recent stablecoin announcements have produced more modest market reactions, with shares trading at approximately $19.60 following a 0.93% gain in the latest session.
Growing Global Interest in Stablecoins
The stablecoin market is experiencing unprecedented growth worldwide as traditional financial institutions and technology companies recognize the potential of digital currencies pegged to stable assets. Major payment processors are expanding their infrastructure to support stablecoin transactions, with Visa recently expanding its stablecoin support amid growing institutional competition. This institutional adoption reflects broader confidence in stablecoins as a bridge between traditional finance and digital assets.
Regulatory developments in key markets are also driving stablecoin adoption. Tether, the world's largest stablecoin issuer, is planning a return to the US market as stablecoin legislation advances, signaling improved regulatory clarity for digital asset companies. Meanwhile, prediction market platforms are exploring their own stablecoin solutions, with Polymarket considering launching its own stablecoin to enhance user experience and reduce transaction costs.
This global momentum reinforces South Korea's strategic timing in developing its domestic stablecoin ecosystem. As international markets embrace stablecoin technology, Korean banks like KakaoBank are positioning themselves to compete in an increasingly interconnected digital financial landscape.
