Summary
South Korea's leading technology companies — Naver and Kakao — are intensifying their competition to dominate the emerging won-denominated stablecoin market as lawmakers revive discussions on the Digital Asset Basic Act. Naver is pursuing a comprehensive share swap with Dunamu (operator of Upbit, South Korea's largest crypto exchange) to place Dunamu under Naver Financial, combining Naver's search and e-commerce platforms, Naver Pay's payment network, and Dunamu's blockchain capabilities. Kakao is building its own ecosystem around KakaoPay and KakaoBank, proposing a consortium of commercial banks to develop a won-backed stablecoin while expanding overseas partnerships through a memorandum of understanding with Circle.
Key Facts
- National Assembly resumed deliberations on Digital Asset Basic Act (expected to establish rules for won-denominated stablecoins)
- Naver pursuing share swap with Dunamu (Upbit operator) to place it under Naver Financial
- Hana Financial Group acquired 6.55% stake in Dunamu, positioning across stablecoin value chain
- Kakao proposing consortium of commercial banks for won-backed stablecoin
- Kakao signed MOU with Circle for overseas partnerships
- Naver Financial's Dunamu acquisition under review by Korea Fair Trade Commission
- Planned amendment to Enforcement Decree could restrict major shareholders of VASPs with financial law violations
- Global stablecoin market: Tether and Circle account for ~90% of circulation
- Analysts say success depends on building payment and settlement networks, not just issuing tokens
Why It Matters
The Naver-Kakao stablecoin race is the most significant development in Asian stablecoin markets since Japan's SBI network build-out. Both companies have existing payment ecosystems with millions of users — Naver Pay and KakaoPay are among Korea's most popular payment platforms — giving them distribution advantages that pure crypto companies cannot replicate. The outcome will determine whether Korea's won-denominated stablecoin market is controlled by a search-and-commerce conglomerate (Naver) or a messaging-and-payments platform (Kakao). The Digital Asset Basic Act's provisions on issuer eligibility and whether issuance and distribution functions must be separated will be decisive. The regulatory review of Naver's Dunamu acquisition — including whether Naver's previous fair trade law violations affect approval — adds uncertainty to the timeline.