With South Korea’s CBDC Plans Dead, KakaoBank Joins Stablecoin Gold Rush
Bank of Korea’s decision to suspend its CBDC pilot in June prompted KakaoBank to pivot toward private-sector stablecoin issuance. During its first-half earnings call, CFO Kwon Tae-hoon confirmed active consideration of stablecoin issuance and custody roles, aligning with new legislation authorizing private stablecoin frameworks.
Technical readiness stems from participation in both phases of the shelved CBDC pilot, providing hands-on experience with wallet operations, exchanges, and transfers. KakaoBank’s compliance team built real-name accounts for crypto exchanges over three years, establishing robust KYC and AML protocols crucial for fiat-pegged token issuance.
Project governance involves a weekly stablecoin task force within the Kakao ecosystem, collaborating with KakaoPay and the parent group. Leadership includes CEOs Chung Shin-ah (Kakao), Shin Won-keun (KakaoPay), and Yoon Ho-young (KakaoBank). The initiative arrives alongside Hong Kong firms awaiting stablecoin licenses after CBDC interest failed to materialize.
Retail investor activity surged following the policy shift. Circle stock, public since June, emerged as the most purchased foreign equity by Korean retail investors. Market observers anticipate competitive stablecoin offerings leveraging KakaoBank’s regulatory familiarity and technical capabilities.
Global parallels include Japan’s stablecoin licensing wave and U.S. legislative efforts under the GENIUS Act. KakaoBank’s entry may stimulate cross-border remittance and B2B payment innovations by leveraging digital dollar alternatives. Industry stakeholders view this move as critical for sustaining South Korea’s fintech leadership.
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