Kakao Group Teams with Circle on Won-Backed Stablecoin Payment Infrastructure

Kakao Group has partnered with Circle to explore payment infrastructure for won-backed stablecoins in South Korea. The companies signed a strategic memorandum of understanding (MOU) to connect Circle's blockchain and global payment infrastructure with Kakao's consumer platforms and financial services.

The agreement highlights how major South Korean consumer and financial platforms are positioning themselves ahead of expected stablecoin legislation, even before the regulatory framework is finalized. Under the MOU, the companies plan to examine stablecoin payments, cross-border remittances, merchant settlement, and connections between existing financial systems and blockchain networks.

The government has been preparing a bill that would establish requirements covering stablecoin issuance, collateral management, and internal controls. However, the regulatory process has stalled over disagreements about which institutions should be permitted to issue won-based stablecoins. The Bank of Korea argued that banks should retain a majority stake in stablecoin issuers, while the Financial Services Commission warned that eligibility limits could restrict competition and innovation.

Kakao Group's move with Circle is part of a broader effort by companies and financial institutions to test the technology in South Korea. Internet bank Kbank partnered with Ripple to test blockchain-based remittances in April, and KB Financial Group completed a pilot covering stablecoin issuance, offline merchant payments, and cross-border remittances through the Kaia blockchain in May.