Kakao, Circle to explore won-backed stablecoin payments

Kakao Group, Kakao Pay and Kakao Bank signed a memorandum of understanding with Circle Internet Group to explore using Circle’s blockchain and global payments infrastructure for won-pegged stablecoin payments, cross-border remittances and merchant settlement in South Korea. The agreement was announced Thursday.

Under the MOU, the companies will study technical connections between Circle’s blockchain rails and Kakao’s consumer platforms and financial services, including on-ramps and settlement functions for won‑pegged tokens.

The scope of the review includes stablecoin payments, cross-border transfers, merchant settlement flows and links between existing banking systems and blockchain networks. The partners will also consider support for tokenized financial services. No specific products, pilots or launch dates were disclosed.

Engineering and business teams from the companies are expected to assess technical and operational integrations, custody and settlement processes, and compliance requirements that would be needed for merchants and consumers to accept and redeem stablecoins in daily transactions.

South Korea is developing a regulatory framework for won-backed stablecoins. Draft legislation under consideration would set rules for issuance, collateral management and internal controls for stablecoin issuers. Lawmakers have introduced competing proposals that differ on which institutions should be allowed to issue won‑pegged tokens.

The Bank of Korea has argued that banks should hold majority stakes in stablecoin issuers, while the Financial Services Commission has warned that strict eligibility limits could restrict competition. Those disagreements have delayed progress on a final bill.

The government’s economic growth strategy published July 14 lists advancing a Digital Asset Basic Act as a priority for the second half of 2026.

Financial firms in South Korea have begun testing stablecoin and blockchain applications ahead of formal rules. In April, internet bank Kbank ran trials of blockchain-based remittances. In May, KB Financial Group completed a pilot covering stablecoin issuance, offline merchant payments and cross-border remittances using the Kaia blockchain.

Kakao and Circle described the MOU as an exploratory effort and provided no timeline for commercial services. The companies noted they will continue technical and regulatory reviews before any potential launch.