South Korea is taking a bold step toward digital currency adoption. Upbit, one of the country’s largest crypto exchanges, is reportedly collaborating with Naver Pay, a major online payments platform, to develop a Korean won (KRW) stablecoin, according to local media reports.
KRW Stablecoin to Boost Payments and Reduce “Kimchi Premium”
The planned stablecoin — pegged 1:1 to the South Korean won — is set to transform digital payments and crypto trading in Korea. One key motivation is to reduce the “kimchi premium,” a pricing gap that frequently arises between South Korean exchanges and global platforms due to capital control restrictions and limited on-chain KRW liquidity.
“We will specify the scope and methods of cooperation as soon as the relevant system is established,” said a Dunamu official, referring to Upbit’s parent company.
By enabling on-chain conversion between KRW and major stablecoins like USDT and USDC, the new asset would allow cross-border traders to bypass traditional fiat rails, improving liquidity and narrowing pricing disparities.
Bank of Korea Halts CBDC as New President Backs Stablecoins
This development aligns with the crypto-friendly stance of South Korea’s newly elected president, who has openly supported a won-based stablecoin market. Following his election in June, the Bank of Korea paused its central bank digital currency (CBDC) plans, effectively clearing the way for private sector innovation.
This policy shift gives private players like Upbit and Naver Pay the green light to drive Korea’s stablecoin adoption, while reducing reliance on traditional banking infrastructure for digital asset transactions.
Why This Matters for Crypto Traders and the Global Market
The KRW stablecoin could mark a major turning point for the South Korean crypto ecosystem, which has long been hindered by regulatory and cross-border transaction limits. By easing movement of funds and standardizing exchange prices, it could:
- End the kimchi premium
- Increase foreign access to South Korean markets
- Promote KRW as a digital trading pair globally
- Boost domestic payments and remittance efficiency
South Korea Moves Toward Crypto Integration
With Upbit and Naver Pay at the helm, and government support behind the initiative, South Korea is poised to become a leader in national stablecoin integration. If successful, the KRW stablecoin could serve as a model for other countries weighing stablecoins vs. CBDCs — and unlock massive new liquidity in Asia’s crypto markets.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.