Updated (October 29, 2:39 pm UTC): This article has been updated with details of BDACS’ September announcement confirming that KRW1, in partnership with Woori Bank, has been launched on the Avalanche blockchain for the first time after a successful proof of concept.
South Korean virtual currency management company BDACS plans to issue a won-backed stablecoin “KRW1” on Circle’s newly launched blockchain Arc.
Yonhap News reported Wednesday that the Busan-based company has signed a memorandum of understanding (MOU) with Circle to develop and deploy KRW1 in Arc, establishing a so-called “organic cooperation framework.”
BDACS CEO Ryu Hong-yeol said, “This partnership is a meaningful step for Korean innovation to reach the world stage.” “By bringing KRW1 to Circle’s Arc, we will open a gateway for Korean companies to participate in the global stablecoin network,” he added.
According to the report, BDACS registered the KRW1 trademark in December 2023, setting the stage for stablecoin deployment. The company officially launched KRW1 in September after a proof of concept with Woori Bank, during which stablecoins were first issued on the Avalanche blockchain. According to a September release, each KRW1 token is fully collateralized with Korean won held in escrow at Woori Bank, with real-time proof of reserves enabled through bank API integration.
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Arc testnet goes live
The move comes a day after Circle’s Arc launched a public testnet. In Tuesday’s announcement, Circle described Arc as an “economic operating system for the Internet” designed to integrate global financial infrastructure directly on-chain.
Arc’s testnet already has over 100 global institutions participating, including BlackRock, Goldman Sachs, Visa, Mastercard, and State Street.
The network features predictable USD-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 tokens on Ark, and South Korea’s KRW1 will join that list.
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Experts criticize South Korea’s bank-led stablecoin plan
Sang-min Seo, chairman of the Kaia DLT Foundation, criticized the Bank of Korea’s (BOK) proposal that local banks take the lead in deploying a won-backed stablecoin as “illogical.”
The Bank of Korea argued that the risks associated with the introduction of stablecoins will be minimal as banks are highly regulated under the capital, foreign exchange and anti-money laundering (AML) framework. It also proposed the establishment of a joint policy body involving monetary and monetary authorities to monitor issuers and volumes.
However, Mr. Xu rejected the central bank’s logic. Instead of restricting issuance to banks, he proposed clear rules for all potential issuers, both banks and non-banks, to meet certain regulatory criteria.
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