KakaoBank Eyes South Korea’s Stablecoin Market Amid Government Regulatory Push

KakaoBank, the digital-only banking arm of South Korean tech giant Kakao, is positioning itself to enter the stablecoin market—just as the government accelerates efforts to establish clear regulations around digital assets.

At its H1 2025 earnings briefing, Chief Financial Officer Kwon Tae-hoon announced that the bank is actively reviewing new business opportunities in digital asset issuance and custody.

The move signals KakaoBank’s intention to become a serious player in the stablecoin sector.

The initiative is being led in collaboration with Kakao’s dedicated stablecoin task force, which includes senior leadership from key affiliates such as KakaoPay.

Kwon underscored that “stability and technological prowess” are critical success factors for any stablecoin operator.

He pointed to KakaoBank’s proven experience in managing real-name verified accounts and implementing advanced crypto-related risk management frameworks for virtual asset exchanges.

He also noted the bank’s direct involvement in the Bank of Korea’s central bank digital currency (CBDC) pilot, where KakaoBank supported digital wallet infrastructure, processed digital transactions, and facilitated remittances.

South Korea's Pro-Stablecoin Policy Environment

KakaoBank’s strategic pivot comes amid a significant regulatory shift in South Korea. President Lee Jae Myung, elected earlier this year, has committed to developing a domestic, won-based stablecoin market to prevent capital flight and foster innovation.

Following his inauguration, a ruling party lawmaker swiftly introduced a bill to lay the legal foundation for KRW-pegged stablecoins—providing regulatory clarity and encouraging private sector involvement.

In response, major players have moved quickly. KakaoPay, a Kakao Group subsidiary, filed several trademark applications for stablecoin ticker symbols in June.

Not long after, KakaoBank filed its own stablecoin-related trademark, triggering a sharp rise in its stock price—from 30,400 Korean won to 37,000 won—marking a 19.3% surge.

However, following the bank’s latest stablecoin announcements, market reaction was more muted. On Wednesday, shares briefly peaked at $20.10 before closing at $19.43. On Thursday, the stock saw a slight uptick of 0.93%, ending the session at $19.60.

Founded in 2016 through a joint venture between Korea Investment Holdings and Kakao Corp., KakaoBank has grown into one of the country’s largest digital banks.

Global Momentum Behind Stablecoins

The stablecoin trend isn’t limited to South Korea. Globally, both major corporations and governments are showing increased interest in this emerging form of digital currency.

A May 14 report by enterprise-grade digital asset platform Fireblocks revealed that 90% of institutional players surveyed are exploring stablecoin adoption within their operations.

In April, a senior Russian Finance Ministry official floated plans for a government-backed stablecoin, while three major financial institutions in Abu Dhabi partnered to launch a dirham-pegged digital currency—further demonstrating the growing momentum toward sovereign and enterprise-backed stablecoins.