South Korean cryptocurrency custodian BDACS plans to issue a Korean won-backed stablecoin "KRW1" on Circle's newly launched blockchain Arc.
According to a report by the Korea News Agency on Wednesday, the Busan-based company has signed a memorandum of understanding (MOU) with Circle to develop and deploy KRW1 on Arc, establishing what they call an "organic cooperation framework."
BDACS CEO Yoo Hong-ryul stated, "This collaboration is an important step for South Korea's innovation to take the global stage. By deploying KRW1 on Circle's Arc, we are opening a door for South Korean companies to participate in the global stablecoin network."
Reportedly, BDACS registered the KRW1 trademark in December 2023, laying the groundwork for the stablecoin's launch. The company officially launched KRW1 in September after a proof of concept with Woori Bank, during which the stablecoin was initially issued on the Avalanche blockchain. According to information released in September, each KRW1 token is fully backed by Korean won held in custody at Woori Bank, with real-time reserve proof achieved through bank API integration.
This move comes a day after Circle launched the public testnet for Arc. In a Tuesday announcement, Circle described Arc as "the economic operating system of the internet," aimed at directly integrating global financial infrastructure on-chain.
The testnet for Arc has already attracted participation from over 100 global institutions, including BlackRock, Goldman Sachs, Visa, Mastercard, and State Street.
The network features predictable dollar transaction fees, sub-second finality, and optional privacy settings, allowing for seamless use of USDC and other fiat-pegged assets.
Stablecoin issuers from Japan, Brazil, Mexico, and the Philippines have already been testing their own national tokens on Arc, and South Korea's KRW1 now joins this lineup.
Dr. Sam Seo, chairman of the Kaia DLT Foundation, criticized the Bank of Korea's (BOK) proposal for a local bank-led launch of the Korean won-backed stablecoin, calling it "illogical."
The Bank of Korea believes that banks, which are strictly regulated under capital, foreign exchange, and anti-money laundering (AML) frameworks, will minimize the risks associated with introducing stablecoins. It also suggested establishing a joint policy body involving monetary and financial authorities to oversee issuers and issuance volumes.
However, Seo rejected the central bank's rationale. He proposed creating clear rules for all potential issuers (including banks and non-bank institutions) that meet specific regulatory standards, rather than limiting issuance to banks.
Related: Kaia Chairman: South Korean central bank's push for bank-led stablecoin issuance "lacks logic"
Original article: “Circle's Arc blockchain attracts South Korea's first Korean won stablecoin project KRW1”
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