Korea's biggest bank just ran a won stablecoin end-to-end

Full Lifecycle Test, From Issuance to Overseas Remittance

KB Financial Group, the parent company of KB Kookmin Bank, has completed a proof of concept covering the full lifecycle of a won-denominated stablecoin, from issuance through offline payments, merchant settlement, and overseas remittance. KB Kookmin is South Korea's largest bank, with over 584.9 trillion won ($266.7 billion) in total assets, according to the bank's own factbook.

The retail portion of the pilot ran at a Hollys coffee kiosk in Seoul. The test enabled customers to pay via QR code without needing to install a separate cryptocurrency wallet, keeping the normal checkout experience intact while moving back-end settlement to blockchain.

On the cross-border side, a won stablecoin was converted into a US dollar stablecoin and delivered to a bank account in Vietnam, with the full transfer completed in under three minutes. According to a @KaiaChain spokesperson, the transaction achieved an 87% fee reduction compared to the equivalent transfer sent through the SWIFT network, the global messaging infrastructure used by thousands of banks worldwide.

Regulatory Green Light Still Pending

KB Kookmin has signalled it intends to launch commercial stablecoin services as soon as Korea's digital asset legislation is finalised. South Korea's ruling Democratic Party has proposed a Digital Asset Basic Act that would establish a legal framework covering issuance, trading, custody, and supervision of digital assets. However, the bill has faced delays, with the Bank of Korea insisting that only banks holding 51% ownership stakes should be authorised to issue stablecoins, while the Financial Services Commission has warned the restriction could stifle innovation.

The broader competitive picture is also taking shape. Eight major Korean banks, including KB Kookmin, Shinhan, Woori, NH NongHyup, Industrial Bank of Korea, Suhyup, Citibank Korea, and Standard Chartered Korea, are reported to be planning a joint venture to issue a Korean won stablecoin together. KB Kookmin, already the most active participant in the group, has filed multiple stablecoin-related trademark applications, including KBKRW and KRWKB.

@KaiaChain, which provided the on-chain liquidity for the cross-border leg of the KB pilot, is an EVM-compatible Layer 1 blockchain formed from the merger of Kakao's Klaytn and LINE's Finschia in August 2024, targeting a combined user base of 250 million across the two super-apps.

Sources:
Cointelegraph: South Korea's KB Financial Completes Stablecoin Pilot for Offline Payments
CoinDesk: South Korea Proposes Comprehensive Digital Asset Law Including Stablecoin Rules
PANews: The Korean Won Stablecoin Competition Has Started in Full Swing