With South Korea’s CBDC Initiatives Halted, KakaoBank Enters the Stablecoin Frenzy

KakaoBank is preparing to enter South Korea’s fast-growing stablecoin sector, according to local reports. In its first-half earnings call on Tuesday, KakaoBank CFO Kwon Tae-hoon said the firm is “actively considering” roles in both stablecoin issuance and custody, with participation aligned to the country’s shifting digital asset policies. “We plan to engage actively in line with market changes,” Kwon said, adding that KakaoBank’s internal task force is collaborating with other Kakao units to consolidate strategy.

This move adds a regulated online bank to the list of Korean fintechs entering the stablecoin race after the Bank of Korea (BOK) paused its central bank digital currency (CBDC) pilot in June. The project had reached the testing phase with commercial banks but was halted following the submission of legislation to enable the local issuance of stablecoins by President Lee Jae-myung’s administration.

Kwon emphasized KakaoBank’s technical readiness, noting the firm had participated in both phases of the now-cancelled BOK pilot. “We built and operated wallets and handled exchanges and transfers,” he said, pointing to operational experience that most firms in the sector cannot yet claim. He also noted three years of compliance work issuing real-name accounts for crypto exchanges, providing the bank with a head start in implementing the kind of KYC and AML frameworks regulators are likely to demand for fiat-pegged tokens.

KakaoBank is part of a weekly stablecoin-focused task force within the Kakao ecosystem, collaborating alongside KakaoPay and the parent group. CEOs Chung Shin-ah (Kakao), Shin Won-keun (KakaoPay), and Yoon Ho-young (KakaoBank) are leading this initiative.

The stablecoin pivot has ignited a wave of speculation and retail activity in Korea’s markets. Circle stock, which went public in June, became the most-purchased foreign equity among Korean retail investors. This move is occurring in parallel with Hong Kong’s stablecoin plans, where local firms are seeking an issuance license following a lack of interest in the People’s Bank of China’s CBDC.