Financial groups race to partner with big tech for stablecoin edge

A composite image shows the headquarters of the country's four largest financial holding companies — KB, Shinhan, Hana and Woori. Korea Times file

Major holding companies in Korea are racing to form partnerships with large tech firms, notably Naver, Kakao, and Samsung Electronics, to gain an edge in the fast-emerging stablecoin market, according to industry officials, Sunday.

The move, undertaken by KB, Shinhan, Hana and Woori, comes as domestic stablecoin transaction volumes have already exceeded 60 trillion won ($41.15 billion), despite the market not yet being fully legalized.

In response, financial regulators are preparing to submit a bill regulating stablecoins to the National Assembly by the end of 2025.

Although discussions are ongoing, banks — the flagship business units of the holding groups — are viewed as viable options to serve as primary issuers of stablecoins pegged to the Korean won, either individually or through a joint consortium with related institutions.

“Under these circumstances, alliances with big tech firms are considered essential, since it would take banks considerable time to develop the necessary technology on their own,” an industry official said. “Tech giants, on the other hand, already have strong platform ecosystems and are best positioned to secure practical use cases once stablecoins are issued.”

Other affiliates within the holding groups — including credit card, insurance, securities and asset management units — also need to prepare for stablecoin-related services, such as managing reserves and risks, and linking existing payment and remittance systems with digital coins.

KB Financial Group, Shinhan Financial Group and Hana Financial Group have already been collaborating with Naver on joint product launches and other initiatives.

Each of them is also exploring ways to expand three-way partnerships with Naver and Dunamu, the operator of Korea’s largest cryptocurrency exchange Upbit, following ongoing merger and acquisition talks between the two companies.

In the case of Woori Financial Group, the company is strengthening its collaboration with Samsung Electronics by capitalizing on the conglomerate’s long-standing main banking relationship with Woori Bank.

The collaboration involves Samsung Wallet, based on Samsung’s Galaxy smartphones, with Woori Bank acting as the sole operator of Samsung Wallet Money and Points.

“While companies like Naver and Kakao are expected to take leading roles in the crypto market by partnering with financial firms, Samsung Electronics also has the capability and operational capacity to issue and manage coins,” another industry official said.

Additionally, financial groups are expanding their crypto-related teams and continuing in-house testing and verification.

KB Kookmin Bank has become the country’s first commercial bank to file 17 trademarks combining its brand name, KB, with “KRW.” This combination of the bank’s initials and the Korean won symbol is intended to serve as a future ticker code for a won-backed stablecoin.

Shinhan Financial Group has been steadily conducting pilot experiments to explore how stablecoins could be used even before they are legalized.

The group is testing the use of stablecoins on its indigenously developed delivery app.

In addition, it is exploring ways to expand the global usage of a won-backed stablecoin by leveraging its partnerships with Japan’s SBJ Bank and Shinhan Vietnam Bank.

Hana Financial Group has announced plans to establish a digital asset task force under the direct supervision of Chairman Ham Young-joo.

The task force will be responsible for consolidating the capabilities of all group affiliates in response to the institutionalization and expansion of the digital asset market.

Woori Financial Group has invested a 5 percent stake in digital asset custody firm BDACS.