KakaoBank targets stablecoin market with 12 trademark filings

KakaoBank CEO Yun Ho-young speaks during a press conference at Fairmont Ambassador Seoul, April 18, 2023. Yonhap

KakaoBank has filed multiple trademark applications related to its stablecoin business in a bid to secure first-mover advantage in the fast-growing market, according to industry and company officials Wednesday.

Korea's largest internet-only bank recently submitted 12 applications to the Korean Intellectual Property Office under four names — BKRW, KRWB, KKBKRW and KRWKKB.

The applications cover three categories: cryptocurrency-related software, cryptocurrency financial-transaction services and cryptocurrency mining.

Filing a trademark establishes priority under the principle of first-to-file, preventing the registration of identical or similar marks in the same category from being submitted afterwards.

"We submitted the trademark applications to proactively respond to developments in the stablecoin market," a KakaoBank official said. "We will continue to carefully monitor relevant legal frameworks and market dynamics."

Stablecoins are digital assets designed to maintain a stable value by being pegged to government-issued currencies such as the U.S. dollar. They also enable real-time payments and reduce the cost and time of international transfers, simplifying financial transactions and attracting global attention.

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According to industry insiders, KakaoBank's investment team is closely tracking developments in the virtual asset industry, including market trends, technological advancements and regulatory changes, laying the groundwork to quickly launch operations once the necessary legal and regulatory conditions are in place.

Earlier, Kakao Pay, another Kakao affiliate specializing in mobile transactions, also proactively filed 18 trademark applications.

These moves come as legislative discussions have accelerated at the National Assembly to introduce the tentatively named Digital Asset Framework Act, following the launch of the Lee Jae Myung administration on June 4.

Once enacted, the new law would permit the issuance of won-pegged stablecoins, and major financial and fintech companies, including KakaoBank and Kakao Pay, are expected to enter the market.

Expectations for the domestic stablecoin market have increased following the appointment of Kim Yong-beom, former first vice finance minister, as the new presidential chief of staff for policy.

Since leaving public office in 2021, Kim has led Hashed Open Research, a think tank affiliated with Hashed, one of Korea's leading blockchain-focused investment firms.

During his tenure, Kim proposed a "Korean-style model" that would allow not only banks but also private financial institutions and fintech companies to issue stablecoins.

Investor optimism over the Lee administration's support for won-backed stablecoins has driven a sharp rally in Kakao-related stocks.

Meanwhile, the Bank of Korea warned that the spread of stablecoins could trigger financial instability, including coin runs — mass withdrawals of coins — and shocks to the foreign exchange market.

In a report released later in the day, the central bank noted that a loss of trust in stablecoins' value or reserves could lead to depegging and large-scale redemptions, potentially spilling over into short-term funding markets and increasing liquidity risks for banks.