Kakao is preparing to launch a Korean won (KRW)-pegged stablecoin on the Kaia blockchain, marking a strategic step toward expanding decentralized finance (DeFi) within its vast ecosystem.
The move follows the recent registration of four trademarks relating to the KRW stablecoin, including names such as “KRWGlobal” and “KRWKaia,” signaling Kakao’s intent to integrate digital won tokens across its platforms, which serve over 49 million monthly users in South Korea.
Kakao Prepares Korean Won Stablecoin on Kaia as Lawmakers Weigh New Rules
► https://t.co/N3fqiSReZa https://t.co/N3fqiSReZa— Decrypt (@DecryptMedia) August 12, 2025
The Kaia blockchain itself is the product of a merger between the Klaytn and Finschia blockchains, with Kakao and its subsidiary Kakao Pay playing significant roles within Kaia’s governance. The stablecoin aims to foster greater DeFi adoption by enabling access to decentralized financial services directly through Kakao’s mobile applications, potentially making these innovations more accessible to the general public.
However, this initiative coincides with ongoing regulatory uncertainty in South Korea. Lawmakers and regulators continue to debate key issues surrounding stablecoins, including licensing requirements, reserve backing standards, the role of banks, and whether stablecoin holders should earn interest. Recently, South Korea introduced a Digital Asset Basic Act that permits qualified companies to issue won-pegged tokens provided they meet certain financial thresholds.
Despite the progress, challenges persist. Experts note the stablecoin’s utility might be limited compared to U.S. dollar-backed alternatives due to South Korea’s strict capital controls, which constrain cross-border transactions and limit offshore use of won-pegged tokens. Additionally, the actual demand for such digital won tokens remains to be proven, pending clear and practical use cases.
The South Korean government is expected to enforce new registration and reporting rules for stablecoin issuers by late 2025, which will influence the project’s trajectory.
Meanwhile, South Korea has launched its first Korean won-backed stablecoin, KRWIN, in a pilot test, marking a significant step towards wider digital asset adoption. Developed by fanC in collaboration with Initech, this stablecoin is pegged 1:1 to the Korean won and is currently undergoing testing for its technical performance and real-world applications within affiliated internal entities.
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