What happened?
In response to the South Korean government’s promotion of a cryptocurrency-friendly environment and plans to legalize the Korean won stablecoin, KakaoBank has announced its active participation in the issuance and custody of stablecoins, demonstrating a strong ambition to seize future digital financial opportunities. In order to highlight its reliability, KakaoBank specifically emphasized that the company possesses substantial relevant experience. This includes participation in the Bank of Korea’s central bank digital currency (CBDC) experiment, as well as customer verification (KYC) and anti-money laundering (AML) risk management practices accumulated over the past three years while providing real-name account services for cryptocurrency exchanges. This serves to prove its capability to ensure the security and stability required for stablecoins.
KakaoBank’s greatest advantage lies in its massive scale. With nearly 26 million users, it covers almost half of South Korea’s population. This large existing customer base provides an unparalleled potential market and ecological foundation for the future development of stablecoin and other digital asset services, making its every move potentially impactful on the South Korean financial market.
Official confirmation of plans, emphasizing stability and technical strength
KakaoBank, the internet bank under South Korea’s IT giant Kakao, recently announced that it will “actively participate” in the digital asset ecosystem and is currently evaluating various service options, including the issuance and custody of stablecoins. This move is seen as a direct response to the new President Lee Jae-myung’s promotion of cryptocurrency-friendly policies, signaling that South Korea’s digital financial market is poised for new transformations. In a financial report conference call in the first half of 2025, KakaoBank’s Chief Financial Officer Kwon Tae-hoon clearly stated that the company is closely collaborating with its parent company Kakao Group’s “stablecoin task force” to jointly plan a blueprint for entering the digital asset field.
Kwon emphasized, “Stability and technical strength are the most critical factors for stablecoins.” He pointed out that KakaoBank has solid experience in this area, including involvement in the central bank digital currency (CBDC) experiment and extensive risk management experience. KakaoBank has previously collaborated with the Bank of Korea to successfully conduct tests for digital wallet opening, transactions, and remittances. At the same time, over the past three years, it has continuously provided real-name authentication account services for cryptocurrency exchanges, during which it has actively implemented customer identification (KYC) and anti-money laundering (AML) monitoring measures. These experiences give KakaoBank confidence in handling the compliance and security required for digital assets.
Policy benefits and market trends
KakaoBank’s actions are closely linked to the current political climate in South Korea. New President Lee Jae-myung has pledged to promote a stablecoin market linked to the Korean won since his campaign period to prevent capital outflow, and under his leadership, the ruling party has submitted a bill to establish a regulatory framework for the Korean won stablecoin. The market responded quickly; in addition to KakaoBank, its sister company KakaoPay applied for a stablecoin-related trademark as early as June. Competitor Kookmin Bank has also taken action simultaneously. Reports indicate that at least eight major banks in South Korea plan to launch stablecoins linked to the Korean won by 2026.
Strong operational performance, but market reaction is muted
Currently, the number of cryptocurrency users in South Korea has exceeded 16 million, accounting for more than 30% of the total population, indicating strong market potential. KakaoBank itself has a solid foundation. As of the first half of this year, its user base reached 25.86 million, approximately half of South Korea’s population. Its operating profit in the first half of the year increased by 11% compared to the same period last year, reaching 353.2 billion won (approximately $254 million), while total deposit balances grew by 19% to 63.7 trillion won (approximately $45.8 billion). Despite the company’s strong fundamentals and clear plans, the capital market’s reaction to this news has been relatively lukewarm. Compared to the 19.3% surge in stock prices when the news of applying for a stablecoin trademark first emerged in June, stock prices only saw a slight increase after the recent earnings conference, closing at 27,150 won (approximately $19.60) on the latest trading day. This may indicate that the market has already priced in related expectations.
With its vast user base, rich fintech experience, and support from government policies, KakaoBank is strategically positioning itself as a key player in the future Korean stablecoin market.
Reference: the block, cointelegraph