South Korean Custodian Plans KRW-Backed Stablecoin on Circle’s Arc, Enhancing USDC Integration

• BDACS partners with Circle via MOU to deploy KRW1 on Arc’s public testnet.

• The collaboration establishes a cooperative framework for stablecoin development and global participation.

• Arc’s testnet already attracts over 100 institutions worldwide, including major players like BlackRock and Visa, with features like sub-second finality boosting appeal—market data shows stablecoins holding a $170 billion cap as of recent reports.

Discover how BDACS’s KRW1 stablecoin launch on Circle’s Arc revolutionizes Korean crypto adoption. Explore global partnerships and blockchain innovations shaping stablecoin futures—stay informed on the latest developments today.

What is KRW1 Stablecoin on Circle’s Arc?

KRW1 stablecoin represents a won-pegged digital asset developed by BDACS, a Busan-based crypto custodian, in collaboration with Circle to operate on the Arc blockchain. This initiative, formalized through a memorandum of understanding, positions KRW1 as a bridge for Korean firms into international stablecoin networks. By leveraging Arc’s infrastructure, KRW1 aims to provide stable, efficient transactions tied to the South Korean won.

Circle’s Arc has seen strong early adoption, with over 100 global financial and fintech giants, including BlackRock, Goldman Sachs, Visa and Mastercard, joining its public testnet.

South Korean crypto custodian BDACS plans to issue a won-backed stablecoin, “KRW1,” on Circle’s newly launched blockchain Arc.

The Busan-based company signed a memorandum of understanding (MOU) with Circle to develop and deploy KRW1 on Arc, establishing what it called an “organic cooperative framework,” according to a Wednesday report by the Yonhap News Agency.

“This collaboration is a meaningful step forward for Korea’s innovation to reach the global stage,” said Ryu Hong-yeol, CEO of BDACS. “By deploying KRW1 on Circle’s Arc, we are opening a gateway for Korean companies to participate in the global stablecoin network,” he added.

BDACS had registered the KRW1 trademark in December 2023, setting the groundwork for the stablecoin’s rollout, per the report.

Top stablecoins by market cap. Source: CoinMarketCap

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How Does Circle’s Arc Blockchain Support Stablecoin Issuance?

Circle’s Arc functions as an advanced economic operating system for onchain finance, enabling seamless integration of global payment rails with predictable dollar-denominated fees and rapid sub-second transaction finality. This setup supports privacy options for users while accommodating assets like USDC and various fiat-pegged tokens, making it ideal for national stablecoins such as KRW1. Early adopters, exceeding 100 institutions including State Street and international issuers from Japan, Brazil, Mexico, and the Philippines, highlight Arc’s scalability; for instance, stablecoin market capitalization has surpassed $170 billion globally, per CoinMarketCap data, underscoring the demand for reliable platforms like Arc. Expert analysis from blockchain developers emphasizes Arc’s role in reducing fragmentation in cross-border payments, with Ryu Hong-yeol of BDACS noting its potential to elevate Korean innovation worldwide. The public testnet’s live status further accelerates testing, ensuring robust performance before mainnet deployment.

Arc testnet goes live

The move comes a day after Circle’s Arc launched its public testnet. In a Tuesday announcement, Circle described Arc as an “Economic Operating System for the internet,” designed to integrate global financial infrastructure directly onchain.

Arc’s testnet has already drawn participation from over 100 global institutions, including BlackRock, Goldman Sachs, Visa, Mastercard and State Street.

The network features predictable US dollar-based transaction fees, sub-second finality and optional privacy settings, allowing seamless use of both USDC (USDC) and other fiat-pegged assets.

Stablecoin issuers from Japan, Brazil, Mexico, and the Philippines are already testing their own national tokens on Arc, and Korea’s KRW1 is now joining that list.

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Expert criticizes bank-led stablecoin plan in Korea

Sangmin Seo, chair of the Kaia DLT Foundation, criticized the Bank of Korea’s (BOK) proposal for local banks to spearhead the rollout of won-backed stablecoins, calling it “illogical.”

The BOK argued that banks, being heavily regulated under capital, foreign exchange, and Anti-Money Laundering (AML) frameworks, would minimize the risks tied to introducing stablecoins. It also suggested forming a joint policy body involving currency and financial authorities to oversee issuers and issuance volumes.

However, Seo rejected the central bank’s reasoning. Instead of restricting issuance to banks, he proposed clear rules for all potential issuers, both banking and non-banking, that meet certain regulatory standards.

Frequently Asked Questions

What are the key features of KRW1 stablecoin on Arc?

KRW1 is a won-backed stablecoin designed for stability and efficiency, pegged directly to the South Korean won. It leverages Arc’s blockchain for low-cost, fast transactions with sub-second finality and privacy controls, enabling secure integration into global finance without volatility risks associated with other cryptocurrencies.

Why is Circle’s Arc attracting global institutions for stablecoin testing?

Circle’s Arc stands out due to its user-friendly design as an onchain financial system, offering predictable fees in US dollars and support for multiple fiat assets. This appeals to institutions seeking reliable infrastructure for stablecoins, as evidenced by participation from over 100 entities worldwide, fostering innovation in payments and custody.

Key Takeaways

• Strategic Partnership Boost: BDACS’s MOU with Circle paves the way for KRW1’s deployment, linking Korean stablecoins to a robust global network.
• Arc’s Rapid Adoption: With more than 100 major firms involved in the testnet, Arc demonstrates strong potential for onchain economic systems, supporting diverse national tokens.
• Regulatory Insights: Debates around bank-led vs. open issuance highlight the need for balanced rules to drive stablecoin growth while managing risks in Korea.

Conclusion

The launch of KRW1 stablecoin on Circle’s Arc marks a pivotal advancement in South Korea’s blockchain landscape, blending local innovation with international infrastructure to enhance stablecoin accessibility. As Arc’s testnet gains momentum with endorsements from financial heavyweights, it promises greater efficiency in global transactions. Stakeholders should monitor regulatory developments closely, positioning themselves to capitalize on emerging opportunities in the evolving stablecoin ecosystem.