South Korea's First Won-Backed Stablecoin Launches on Avalanche

KRW1: A New Era for Stablecoins in South Korea

Digital asset custodian BDACS, in collaboration with Woori Bank, has officially launched KRW1, marking South Korea's inaugural fully regulated stablecoin backed by the Korean Won (KRW). This significant step forward follows a successful proof-of-concept phase that validated the robust technical infrastructure designed for fiat deposits, token issuance, and blockchain verification.

Each KRW1 token is fully collateralized by Korean Won held in escrow at Woori Bank. A real-time banking API integration ensures transparent proof of reserves, providing users with confidence in the stablecoin's backing.

BDACS strategically trademarked the KRW1 brand in December 2023, demonstrating a proactive approach in anticipation of formal regulations. The stablecoin operates on the Avalanche blockchain, selected for its "high-performance capabilities" and recognized reliability in public-sector applications by Korea's Internet & Security Agency.

Key Takeaways:

• First-of-its-kind: KRW1 represents South Korea's first fully regulated, won-backed stablecoin.
• Transparent Reserves: Real-time API integration with Woori Bank provides proof of collateralization.
• Avalanche Integration: KRW1 leverages the Avalanche blockchain for speed and reliability.
• Future Expansion: Plans are in place to expand to other blockchains and explore partnerships with global stablecoin networks.

BDACS envisions KRW1 serving various applications, including remittances, payments, investments, and deposits. Furthermore, public-sector deployments are planned for low-cost payment and settlement systems, particularly in emergency relief disbursement scenarios. The company aims to expand KRW1 to additional blockchains and explore collaborations with major USD-backed stablecoin issuers like Circle and Tether.

Regulatory Landscape & Competition

This launch occurs amid growing stablecoin initiatives across Asia. Kakao, a South Korean internet giant, is also developing a won-pegged token through its Kaia blockchain. In Japan, JPYC anticipates regulatory approval for its yen-backed stablecoin, while Ripple and SBI Holdings plan to launch RLUSD in Japan by early 2026.

South Korean lawmakers are currently debating competing stablecoin bills, both emphasizing full reserve backing and increased oversight by the Bank of Korea. These regulatory discussions highlight the importance of balancing innovation with consumer protection and monetary sovereignty.