Ok Il-jin, Executive Vice President of Digital Innovation at Woori Financial, confirmed the initiative in an interview with Herald Business published March 10. The bank is working with blockchain startup BIDEX to test KRW-backed stablecoin infrastructure for business-to-business settlements and tokenized securities, and is in active talks with overseas cryptocurrency exchanges to provide liquidity for international transactions. Woori has also identified Wonbiz Plaza, its existing corporate supply chain finance platform, as a primary deployment target for stablecoin-powered payment automation using smart contracts (self-executing code that releases funds when preset conditions are met).

"Companies with overseas subsidiaries constantly need to send money abroad," Ok said. "Stablecoins can significantly shorten settlement times and reduce transaction costs." He added: "Our goal is to develop practical use cases that companies can adopt in real business environments."

Five Korean Banks, One Corridor

Woori is one of five major Korean commercial banks now enrolled in Project Pax, a Korea-Japan stablecoin remittance pilot conceived by Progmat, a joint venture of Japan's three largest banks: Mitsubishi UFJ Trust, Mizuho, and SMBC. The other four Korean participants are Shinhan, NH NongHyup, KB Kookmin, and Hana Bank. The project works by converting Korean won into a KRW-pegged stablecoin, moving it across a blockchain, then converting it into Japanese yen on the other side. Domestic payment networks in both countries remain unchanged; the stablecoin layer handles only the cross-border transfer. Chainlink provides cross-chain interoperability infrastructure to FairsquareLab, a participant in the project stack.

Phase 1 of technical verification concluded in September 2025. According to Korea Times reporting from September 2025, stablecoin-based transactions settled faster and at lower cost than traditional remittance systems. Phase 2 is targeting SWIFT integration for real-time interoperability and, critically, support for small-value retail remittances. That second goal matters for millions of migrant workers across the region.

The Regulatory Deadlock

Despite the banking sector's momentum, a core legal obstacle remains in place. South Korea has effectively prohibited domestic issuance of KRW-backed stablecoins for nearly nine years. The pending Digital Asset Basic Act would lift that ban, but the bill missed a December 10, 2025 government deadline and has not yet cleared the legislature as of March 10, 2026.

The delay stems from a dispute between two regulators. The Bank of Korea wants stablecoin issuance restricted to bank-led entities with majority ownership stakes, arguing this limits systemic risk. The Financial Services Commission has pushed back, warning that a strict ownership threshold could block fintech firms that have stronger technical capacity to build scalable blockchain infrastructure. According to CoinDesk's December 2025 regulatory coverage, the FSC's position is that a rigid 51% ownership rule could suppress competition and block entry by fintech firms.

The draft framework does establish some common ground. All stablecoin issuers, whether domestic or foreign, would be required to hold 100% reserves at licensed institutions, with those reserves kept entirely separate from the issuer's own balance sheet. Foreign issuers such as Circle, which operates USDC, could participate under FSC rules if they establish a licensed branch or subsidiary in Korea. Paying interest to coin holders would be explicitly prohibited.

President Lee Jae Myung has framed KRW-backed stablecoin development as a matter of monetary sovereignty in a global payment landscape dominated by USD-pegged assets.

What It Means Beyond Korea

The market context for this push is substantial. Global stablecoin transaction volume reached a record $33 trillion in 2025, up 72% year-over-year, according to Bloomberg. Total stablecoin market capitalization stood at approximately $318 billion in early 2026, with USDT holding a 60% share at $187 billion and USDC at $75.7 billion.

The practical stakes for users outside Korea are significant. South Korea hosts large migrant worker populations from Nepal, Bangladesh, the Philippines, and Myanmar. South Korea is Nepal's sixth-largest remittance source, and workers from the Philippines and Bangladesh send approximately 42% and 25% of their incomes respectively through remittance channels. Remittance fees using traditional channels typically run between 2% and 7% of the transfer amount, with some corridors reaching as high as 20% according to IMF data. Stablecoin-based corridors have recorded costs of roughly 0.5% to 2% in general estimates, with documented examples such as the Lagos-to-Nairobi corridor running approximately 1.5% to 2.5% all-in. Settlement times are measured in seconds or minutes rather than business days.

The implications extend to Africa as well. Africa currently records the world's highest stablecoin adoption rate at 9.3%, and Sub-Saharan Africa faces an average remittance cost of 7.9%. Retail stablecoin transfers in Ethiopia grew 180% year-over-year, and established players such as Western Union have entered the space with stablecoin products built on public blockchains. Korea's proposed 100% reserve requirement for stablecoin issuers is being tracked closely by African regulators developing their own frameworks, making the outcome of Korea's legislative process a potential reference point well beyond Asia.

Project Pax's architecture is designed to allow non-bank institutions, including corporations, secondary financial institutions, and fintech firms, to participate through open APIs. For builders in South Asia or Africa seeking to connect into Korean payment flows, the passage of Korea's Digital Asset Basic Act, expected in Q1 2026, is the regulatory event to watch most closely. If the law passes and the Korea-Japan corridor extends to support retail remittances at scale, the technical template for a Korea-South Asia corridor using similar architecture would be readily available.

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Sources: Korea Herald, Korea Times, Seoul Economic Daily, CoinDesk, KoreaTechDesk, Blockchain Reporter, IMF Blog, Bloomberg, MEXC News, UNCDF Migrant Money, TechCabal, Transak, Finextra