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South Korea’s fintech landscape is bracing for a seismic shift as Kakao Bank ramps up stablecoin development and Naver moves toward a multibillion-dollar merger with Dunamu, the operator of Upbit, the country’s largest crypto exchange. Both developments come at a pivotal moment, as lawmakers advance new stablecoin legislation that could redefine digital finance across the nation.
Kakao Accelerates Plans for “Kakao Coin”
According to local media, Kakao Bank is now actively building blockchain infrastructure for its planned stablecoin, tentatively referred to as “Kakao Coin.” The initiative reportedly follows an internal review and is being led by Kakao founder Kim Beom-soo, who was acquitted of market manipulation charges in October.
With Kakao’s massive user footprint—spanning messaging apps, digital banking, and payments—the company aims to leverage its ecosystem to drive stablecoin adoption. The push aligns with a global surge in stablecoin usage: TRM Labs reports that stablecoins made up 30% of all on-chain crypto transactions in 2025, including record highs in August.
However, South Korea has yet to establish clear rules for stablecoin issuers, forcing firms like Kakao to move forward despite regulatory uncertainty.
Meanwhile, Naver Financial and Dunamu are preparing to approve a massive 20 trillion won equity swap that will make Dunamu a wholly owned Naver subsidiary. The merger combines Naver’s vast payments business—processing 80 trillion won annually—with Upbit’s dominance in the crypto market.
As part of the agreement, Dunamu founder Song Chi-hyung will receive a 30% stake, decreasing Naver’s ownership to 17%. Analysts say the merger could enable instant stablecoin distribution across Naver platforms and potentially pave the way for a U.S. listing.
The combined expertise in AI, data, payments, and digital assets positions Naver–Dunamu to become a leading issuer of won-backed stablecoins once regulation is finalized.
South Korea Races to Define Stablecoin Rules
Regulators are now racing to introduce comprehensive oversight. Democratic Party lawmaker Kim Byung-kee has proposed the Value-Stable Virtual Asset Issuance and User Protection Act, which would require:
- 100% reserves in cash or sovereign bonds
- A 3% contingency fund
- Stablecoin issuance on public blockchains like Ethereum or Solana
- A 10-day redemption window
- Limits on interest or investor gains
International issuers such as Tether and Circle would also need to register and obtain a license.
The Financial Services Commission would handle licensing, while the Bank of Korea would oversee systemic risk—though jurisdictional disputes continue to delay progress. More than a dozen crypto-related bills remain under Assembly review.
As the regulatory picture evolves, the fate of Kakao’s and Naver–Dunamu’s stablecoin ambitions will hinge on whether lawmakers can finalize rules before global competitors advance further.
