KakaoBank, the digital bank under South Korea’s IT giant Kakao, has reportedly started the development phase of its Won-pegged stablecoin project in preparation for the upcoming advances of key crypto-related legislation in the country.
KakaoBank’s Stablecoin Development ‘In Full Swing’
On Wednesday, local news media outlet Newspim reported that KakaoBank has advanced its “Kakao Coin” project from the review stage to the development phase of a won-pegged stablecoin.
According to the report, the South Korean IT firm is “fully committing its capabilities to execute its stablecoin strategy,” which will be centered on its affiliate KakaoBank. Financial industry sources told Newspim that the company recently started recruiting blockchain service backend developers for its new Business Service Development Team.
Notably, KakaoBank is focusing on roles such as designing new blockchain-based service architectures, managing keys, and building transaction processing systems, looking for expertise in smart contracts, token standards, and full node operation.
As the report noted, the move signals KakaoBank’s intent to build its own blockchain infrastructure and connect it to financial services, aligning with the group’s push to establish a stablecoin ecosystem.
In August, Kakao Group made its won-pegged token initiative a core future business for the company, launching a “KRW Stablecoin Joint Task Force (TF)” with its major affiliates, including Kakao, KakaoBank, and KakaoPay.
Moreover, KakaoBank previously submitted trademark applications for four names combining KRW with the abbreviation of the bank’s name, KKB, to the Korean Intellectual Property Office under three categories related to crypto-based electronic transfers and financial transactions.
Nonetheless, the project’s development recently faced judicial risks related to Kakao’s founder, Kim Beom-su. Kim faced charges of stock price manipulation linked to SM Entertainment, but was recently acquitted during the first trial.
South Korea’s Race Intensifies Despite Regulatory Uncertainty
On Tuesday, local news outlets unveiled that Naver Financial is pushing forward with its stablecoin-related projects. According to the report, the company recently completed the development phase of a stablecoin wallet project in Busan, in partnership with the Busan Digital Asset Exchange (BDAN) and venture capital firm Hashed.
The wallet project is reportedly scheduled to be officially announced and launched next month. Meanwhile, its full functionality is expected to be unlocked after the related regulation is established.
However, stablecoin legislation in South Korea risks being delayed until next year, as the Financial Services Commission (FSC) clashes with the Bank of Korea (BOK) over the role of banks in the sector.
As reported by Bitcoinist, financial authorities are looking to open the market to tech companies, while BOK insists that the financial institutions should hold at least 51% of any stablecoin issuer seeking regulatory approval.
Many industry players consider that the central bank’s proposal could stifle innovation and reduce market participation from tech companies. The FSC recently expressed concerns about BOK’s expanded powers proposal, arguing that “Virtual asset regulation should be designed consistently within the FSC’s existing legal framework.”
“Distributing inspection authority across multiple agencies could create confusion in the market,” the FSC affirmed. The reports claim that even if the ownership issue is resolved, many other regulatory rules remain uncertain, which increases the chances of a potential delay.
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