What happened?
South Korean digital asset custodian, BDACS, has launched the country’s first Korean won-backed stablecoin on the Avalanche blockchain. This stablecoin named KRW1 is fully collateralised by actual Korean won deposits held at Woori Bank. The launch comes after a successful proof of concept phase validating the feasibility of this stablecoin.
Who does this affect?
This development has implications for banks, users, and institutions that are part of the Avalanche blockchain ecosystem. BDACS, with support from Avalanche, aims to shape Korea’s digital economy with the launch of KRW1. Additionally, other financial institutions in Korea, like Kakao Bank, Kookmin Bank, and the Industrial Bank of Korea, who have filed for Korean won stablecoin trademarks, could be influenced by this initiative.
Why does this matter?
The launch of KRW1 is a significant step towards regulated, bank-integrated digital money in Korea. It not only lowers payment processing fees but also enables its use as a “low-cost payment and settlement system” for public-sector programs, which could establish it as a standard for stablecoins in Korea. This move contributes to the ongoing trend of traditional finance players entering the stablecoin market in South Korea.