• KakaoBank is developing a Korean won-pegged stablecoin as part of its digital finance expansion.
• KakaoPay’s growing user base strengthens its stablecoin initiative, with plans for ticker symbols filed in June.
• Naver’s merger with Upbit and regulatory challenges add complexity to South Korea’s stablecoin market.

South Korea’s KakaoBank has officially moved forward with its plan to develop a Korean won-pegged stablecoin. This step is part of the digital bank’s broader effort to enter the rapidly evolving digital finance sector, marking a significant milestone for the Kakao Group.

Kakao Strategic Development Push and Focus on Digital Finance

KakaoBank’s stablecoin initiative is now in the development phase, according to reports from Newspim. The digital bank is recruiting blockchain service backend developers, focusing on key areas such as smart contracts, token standards, and transaction management. This development indicates KakaoBank’s commitment to launching a locally pegged stablecoin.

A post on X by the Martini Guy yconfirmed KakaoBank’s move to create a stablecoin aligns with the company’s ongoing efforts to expand into digital finance. In August 2025, CFO Kwon Tae-hoon confirmed the bank’s interest in exploring options like digital asset issuance and custody. Kakao Group has already formed a task force to strategize its future in digital finance, with a focus on stablecoin integration.

KakaoPay, the payment subsidiary of Kakao, has also been taking significant steps towards the stablecoin launch. The firm registered copyrights for a variety of stablecoin ticker names that incorporate the Kakao and the Korean won back in June. By now, the number of KakaoPay members has reached 42 million, thus enhancing its digital financial ecosystem in South Korea.

Rising Competition from Naver and Regulatory Challenges for Stablecoin Development

KakaoBank’s stablecoin venture comes amid growing competition from rival tech giant Naver. Naver is in the process of merging with Upbit, South Korea’s largest cryptocurrency exchange. Naver’s financial division, Naver Financial, is reportedly working on a wallet service for its own stablecoin project. NaverPay, the company’s payments platform, serves 30 million users monthly, a substantial market rivaling KakaoPay.

The South Korean government has shown interest in establishing a local stablecoin market, with President Lee Jae Myung calling for a Korean won-pegged stablecoin initiative. However, regulatory progress has been slow. Despite efforts by lawmakers to create legal frameworks for stablecoins, challenges remain, especially regarding the Bank of Korea’s stance that only registered banks can issue stablecoins. KakaoBank, along with other players in the digital finance space, continues to navigate these regulatory hurdles as they seek to expand their offerings in the growing stablecoin market.