Kakao Bank has reportedly shifted to active stablecoin development under founder Kim Beom-soo, while Naver is finalizing a merger with Dunamu, the operator of Upbit, South Korea’s largest crypto exchange.
These moves come as lawmakers push forward stablecoin bills that could reshape the country’s digital financial landscape.
Kakao Accelerates Stablecoin Development
According to a local media report, Kakao Bank is building blockchain infrastructure for its planned stablecoin, “Kakao Coin,” following an internal review. With its large user base across messaging, banking, and payments, Kakao aims to use its network to drive stablecoin adoption. Kim Beom-su, the founder of Kakao, is reported to lead the project. He was acquitted of market manipulation charges in his first trial in October.
The move occurs during a global increase in stablecoin usage. TRM Labs reports that stablecoins accounted for 30% of all on-chain crypto transactions in 2025, with record volumes in August 2025. While financial institutions expand digital asset integration, Kakao positions itself as a key issuer despite regulatory uncertainty.
South Korea’s National Assembly has yet to enact comprehensive stablecoin regulation. This uncertainty forces firms such as Kakao to advance their projects amid competition and unclear rules.
Naver-Dunamu Merger Reshapes Competition
On Wednesday, Naver Financial and Dunamu are to hold their respective board meetings to approve an equity swap that will make Dunamu a wholly owned Naver subsidiary. The 20 trillion won merger unites Naver’s payment infrastructure (80 trillion won in annual payments) with Upbit, South Korea’s leading crypto exchange. Dunamu founder Song Chi-hyung receives a 30% stake, reducing Naver’s share to 17%.
The merger is likely to enable instant stablecoin distribution on Naver’s platforms and leverage Dunamu’s regulatory experience. It may also lead to a US listing, as BeInCrypto reported. Once legislation is clear, the partnership could help Naver-Dunamu become a top issuer of won-backed stablecoins.
Analysts say the merger, combining expertise in artificial intelligence, data, payments, and digital assets, could set the standard for stablecoin rollouts in South Korea. The move is widely seen as transformative for the nation’s fintech sector.
Legislative Race Shapes Regulatory Future
Regulation remains the key hurdle. Majority Floor Leader Kim Byung-kee, a Democratic Party lawmaker, introduced the “Value-Stable Virtual Asset Issuance and User Protection Act.” The bill mandates 100% cash or sovereign bond reserves, a 3% contingency fund, and issuance on public blockchains such as Ethereum or Solana.
Other features include a ten-day redemption window and strict limits on interest or economic gains. International issuers like Tether or Circle must register and obtain a license to conduct business in South Korea.
The Financial Services Commission handles licensing, while the Bank of Korea monitors risks. These agencies continue to debate jurisdiction, as interagency issues remain, especially those related to monetary policy.
Regarding crypto asset legislation in the country, more than a dozen bills are under review by the Assembly. However, unresolved disputes between regulators could lead to further delays.
Ultimately, regulatory clarity will decide if Kakao and Naver-Dunamu bring stablecoins to Korean finance, or if these projects remain in testing as global adoption advances elsewhere.
