BDACS, a crypto custodian based in South Korea, is set to launch a won-backed stablecoin called “KRW1” on Circle’s newly introduced blockchain, Arc.
The Busan-based firm has entered into a memorandum of understanding (MOU) with Circle to create and implement KRW1 on Arc, establishing an “organic cooperative framework,” according to a report by the Yonhap News Agency published on Wednesday.
“This collaboration represents a significant advancement for Korea’s innovation to attain a global presence,” commented Ryu Hong-yeol, CEO of BDACS. “By launching KRW1 on Circle’s Arc, we are creating an opportunity for Korean enterprises to engage in the global stablecoin ecosystem,” he added.
BDACS registered the KRW1 trademark in December 2023, laying the foundation for the stablecoin’s launch, as detailed in the report.
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Arc testnet goes live
This development follows the launch of Circle’s Arc public testnet a day earlier. In a Tuesday announcement, Circle characterized Arc as an “Economic Operating System for the internet,” aimed at embedding global financial infrastructure directly on-chain.
Arc’s testnet has already attracted participation from over 100 international institutions, including BlackRock, Goldman Sachs, Visa, Mastercard, and State Street.
The network offers predictable US dollar-based transaction fees, sub-second finality, and optional privacy features, facilitating seamless transactions with both USDC (USDC) and other fiat-pegged assets.
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Expert criticizes bank-led stablecoin plan in Korea
Sangmin Seo, chair of the Kaia DLT Foundation, has critiqued the Bank of Korea’s (BOK) suggestion that local banks lead the issuance of won-backed stablecoins, describing it as “illogical.”
The BOK contended that heavily regulated banks under capital, foreign exchange, and Anti-Money Laundering (AML) regulations would mitigate risks associated with introducing stablecoins. It also proposed forming a collaborative policy body with currency and financial authorities to supervise issuers and control issuance volumes.
Nevertheless, Seo dismissed the central bank’s argument. He instead recommended establishing clear guidelines for all potential issuers, both banks and non-banks, that comply with specific regulatory criteria.
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