Kakao and Circle Sign MOU to Build Won Stablecoin Infrastructure Ahead of 2026 Legislation

Woofun AI reports that Kakao Group and Circle have formalized a strategic partnership to develop payment infrastructure for won-backed stablecoins, signaling a proactive stance by major entities ahead of South Korea’s evolving crypto regulatory framework.

On Thursday, Kakao, Kakao Pay, and Kakao Bank signed a strategic memorandum of understanding (MOU) with Circle Internet Group. The agreement aims to integrate Circle’s blockchain and global payment infrastructure with Kakao’s consumer platforms and financial services. Under this framework, the parties will explore stablecoin payments, cross-border remittances, merchant settlement, and the connection between existing financial systems and blockchain networks. They will also consider support for tokenized financial services, though no specific products or launch timelines were disclosed.

Per Woofun AI, this collaboration occurs as South Korea works toward legislation governing won-backed stablecoins to encourage digital payment innovation while addressing risks related to reserves, redemption, and issuer oversight. The government is preparing a bill establishing requirements for stablecoin issuance, collateral management, and internal controls. Lawmakers have introduced competing proposals amid growing support for won-pegged tokens aimed at reducing reliance on the US dollar.

However, the regulatory process has stalled due to disagreements over which institutions should be permitted to issue won-based stablecoins. The Bank of Korea argued that banks should retain a majority stake in stablecoin issuers, while the Financial Services Commission warned that eligibility limits could restrict competition and innovation.

In its economic growth strategy announced on July 14, the government listed advancing the Digital Asset Basic Act among its priorities for the second half of 2026.

Meanwhile, competitors have begun testing technology; in April, Kbank partnered with Ripple to test blockchain-based remittances, and in May, KB Financial Group completed a pilot covering stablecoin issuance, offline merchant payments, and cross-border remittances through the Kaia blockchain.

With KB Financial Group preparing to introduce stablecoin services once regulations take effect, the market is positioning for immediate deployment upon legislative clarity.