TLDR

• KakaoBank reviews options for stablecoin issuance and custody in South Korea.
• South Korea’s President supports local won-based stablecoin to reduce capital flight.
• KakaoBank participates in Bank of Korea’s CBDC trial, showing digital asset expertise
• KakaoPay files trademark for stablecoin symbols as part of market expansion.

KakaoBank, the banking arm of South Korea’s Kakao Group, has signaled plans to enter the growing stablecoin market in the country. The move comes as South Korea intensifies its push to establish a regulatory framework for digital assets, especially stablecoins backed by the Korean won.

KakaoBank’s Strategy in Digital Assets

During KakaoBank’s earnings call for the first half of 2025, CFO Kwon Tae-hoon revealed that the bank is exploring various methods to participate in the digital asset ecosystem.

This includes the potential issuance and custody of digital assets such as stablecoins. KakaoBank is working closely with Kakao Group’s stablecoin task force to assess and implement these strategies.

Kwon highlighted that KakaoBank has developed strong expertise in digital asset risk management. For the past three years, the bank has issued real-name verified accounts for virtual asset exchanges and implemented Know Your Customer (KYC) and Anti-Money Laundering (AML) monitoring. These experiences make the bank well-positioned to navigate the stablecoin space.

KakaoBank’s Role in South Korea’s Digital Asset Future

The push for a local stablecoin market is also supported by South Korea’s President, Lee Jae Myung, who has emphasized the need for a South Korean won-backed stablecoin. President Lee’s administration is working on establishing a regulatory framework that would allow stablecoins to flourish in the country. The government’s goal is to reduce the risk of capital flight and strengthen control over digital currencies.

KakaoBank’s entry into the stablecoin market comes at a time when South Korean lawmakers are considering new regulations for digital assets. A recent bill was submitted to the National Assembly to lay the groundwork for regulating KRW-backed stablecoins.

As part of its preparations, KakaoPay, the payment division of Kakao Group, has already filed trademark applications for stablecoin symbols. This move indicates the broader ambitions of the Kakao Group to position itself as a leader in the digital asset space.

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KakaoBank’s Growth and Market Expansion

In its latest earnings report, KakaoBank announced strong growth in both profits and its user base. The bank reported an 11% increase in operating profits, reaching 353.2 billion won ($254 million) in the first half of 2025. Its deposit balance also grew by 19%, totaling 63.7 trillion won ($45.8 billion).

Moreover, the bank added nearly one million users during this period, bringing its total user base to 25.86 million, about half of South Korea’s population.

These results reflect KakaoBank’s growing influence in the country’s digital banking and financial sectors. Its ability to attract millions of users demonstrates strong consumer confidence and market demand. By stepping into the stablecoin market, the bank aims to build on this momentum and offer more innovative financial products.

Stablecoin Task Force

KakaoBank’s involvement with Kakao Group’s stablecoin task force further positions it to play an important role in the country’s digital currency landscape. The task force is responsible for assessing the technological and regulatory aspects of stablecoins, ensuring that KakaoBank’s offerings meet South Korean regulatory standards. The collaboration between KakaoBank and its parent company will likely help streamline the bank’s entry into the market, especially in the face of rapidly evolving regulatory changes.

This approach reflects a broader trend where established financial institutions are beginning to incorporate digital asset management into their core offerings. As South Korea’s regulatory framework continues to evolve, KakaoBank’s role in the stablecoin market could set the stage for future innovation in digital payments and asset management.

With the Korean government pushing forward with stablecoin regulation, KakaoBank is positioning itself as a key player in the country’s digital finance future.