South Korea’s First Won-Backed Stablecoin KRWI Launches on Avalanche

Key Insights

• South Korea launches First Won-backed stablecoin on Avalanche

• Each KRW1 token is fully collateralized with reserves held at Woori Bank, one of South Korea's largest financial institutions

With the increasing adoption of cryptocurrency, stablecoins have become extremely popular. In this regard, stablecoins backed by other local currencies are starting to become the norm. This has seen various countries launch their coins, with South Korea becoming the latest.

South Korea's First Won-backed stablecoin.

South Korea has taken a bold step toward a digital money future. BDACS, a local crypto custody firm, in partnership with Woori Bank, has launched KRW1, the first stablecoin fully backed by the South Korean won. Built on the Avalanche blockchain, KRW1 represents a new chapter in Korea's digital economy.

KRW1 Backed by Woori Bank Reserves

Each KRW1 token is fully collateralized with reserves held at Woori Bank, one of South Korea's largest financial institutions. Real-time API integration between the bank and BDACS provides transparent proof of reserves, ensuring users can verify backing at any time. The launch isn't just about creating a token.

BDACS has built a complete framework, including: Issuance and management systems, a user-facing app for peer-to-peer transfers, and transaction verification features. This infrastructure aims to make KRW1 a reliable and scalable stablecoin for both local and global use.

Pilot Phase Amid Regulatory Uncertainty

Currently, KRW1 is in a proof-of-concept (PoC) phase and is not yet available for public circulation. That's because South Korea still lacks a clear regulatory framework for stablecoins. Lawmakers are actively debating new bills, while President Lee Jae Myung has voiced support for local stablecoin initiatives to strengthen Korea's monetary sovereignty.

Meanwhile, the central bank has cautioned that stablecoin issuance should be limited to licensed banks to avoid financial instability. By launching KRW1 in pilot mode, BDACS is positioning itself ahead of upcoming regulation—without overstepping current rules.

Future Use Cases and Global Expansion

BDACS envisions KRW1 as more than just a local stablecoin. Its roadmap includes applications in various aspects of daily life. Thus, KRW1 will play a significant role in remittances, payments, deposits, and investments. At the same time, the public sector will benefit significantly from settlements such as emergency relief disbursements.

Looking ahead, the company plans to expand KRW1 onto other blockchains to improve interoperability. BDACS is also exploring collaborations with global dollar-backed stablecoins like USDT and USDC.

Positioning in Korea's Stablecoin Race

South Korea's financial sector is already preparing for a wave of stablecoin launches, with banks and institutions filing trademark applications for ticker symbols.

Instead of competing with large tech firms that may eventually enter the market, BDACS says it views them as potential collaborators in building out Korea's digital currency ecosystem.

The launch of KRW1 may still be in pilot mode, but it signals South Korea's intention to adopt a regulated, bank-backed digital currency. By leveraging Avalanche's blockchain and partnering with Woori Bank, BDACS is paving the way for a secure, transparent, and scalable stablecoin, one that could become a cornerstone of Korea's digital economy.

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