South Korean crypto custodian BDACS has unveiled plans to launch a won-backed stablecoin, dubbed “KRW1,” on Circle’s newly introduced blockchain, Arc.
The Busan-based firm signed a memorandum of understanding (MOU) with Circle to jointly develop and deploy KRW1 on Arc, forming what it described as an “organic cooperative framework,” according to a Wednesday report from Yonhap News Agency.
“This collaboration marks a meaningful step in bringing Korean innovation to the global stage,” said Ryu Hong-yeol, CEO of BDACS. “By issuing KRW1 on Circle’s Arc, we’re opening new opportunities for Korean enterprises to engage with the global stablecoin ecosystem,” he added.
BDACS had registered the KRW1 trademark in December 2023, laying the foundation for the stablecoin’s forthcoming launch, the report noted.
Arc testnet goes live
The announcement follows the launch of Circle’s Arc public testnet, unveiled just a day earlier. In a Tuesday statement, Circle described Arc as an “Economic Operating System for the internet,” aimed at integrating global financial infrastructure directly onchain.
The Arc testnet has already attracted participation from over 100 global institutions, including BlackRock, Goldman Sachs, Visa, Mastercard, and State Street.
Built for speed and predictability, Arc offers US dollar–denominated transaction fees, sub-second finality, and optional privacy controls, enabling smooth interaction between USDC and other fiat-backed assets.
Stablecoin issuers from Japan, Brazil, Mexico, and the Philippines are already testing national tokens on Arc — and Korea’s KRW1 is now joining their ranks.
Expert criticizes Korea’s bank-led stablecoin plan
Sangmin Seo, chair of the Kaia DLT Foundation, has criticized the Bank of Korea’s (BOK) proposal to have local banks lead the issuance of won-backed stablecoins, calling the approach “illogical.”
The BOK argued that banks’ existing oversight under capital, foreign exchange, and anti–money laundering (AML) regulations would help mitigate risks linked to stablecoin deployment. It also suggested forming a joint policy council of currency and financial regulators to supervise issuers and control issuance volumes.
Seo, however, dismissed this reasoning, contending that rather than limiting issuance to banks, regulators should establish clear, consistent standards that allow both banking and non-banking institutions to participate if they meet the required safeguards.
