Kakao Group Partners with Circle for Won-Backed Stablecoin Payments

Kakao Group has partnered with stablecoin issuer Circle to explore payment infrastructure for won-backed stablecoins as South Korea prepares a broader regulatory framework for crypto assets.

On Thursday, the companies announced that Kakao, Kakao Pay and Kakao Bank had signed a strategic memorandum of understanding (MOU) with Circle Internet Group. Under the agreement, the companies will explore ways to connect Circle’s blockchain and global payment infrastructure with Kakao’s consumer platforms and financial services.

The agreement highlights how major South Korean consumer and financial platforms are positioning themselves ahead of expected stablecoin legislation, even before the regulatory framework is finalized.

Under the MOU, the companies plan to examine stablecoin payments, cross-border remittances, merchant settlement and connections between existing financial systems and blockchain networks.

The companies will also consider support for tokenized financial services, but they did not disclose any products or launch timelines.

Cointelegraph reached out to Circle and Kakao Group but did not receive a response before publication.

South Korea’s stablecoin framework

South Korea has been working toward legislation governing won-backed stablecoins as policymakers seek to encourage digital payment innovation while addressing risks related to reserves, redemption and issuer oversight.

The government has been preparing a bill that would establish requirements covering stablecoin issuance, collateral management and internal controls. Lawmakers have also introduced competing proposals as support has grown for won-pegged tokens aimed at reducing reliance on the US dollar.

However, the regulatory process has stalled over disagreements about which institutions should be permitted to issue won-based stablecoins.

The Bank of Korea, the country’s central bank, 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.

Related: South Korean regulator misses stablecoin bill deadline: What’s next?

Meanwhile, companies and financial institutions have begun testing the technology in South Korea. In April, internet bank Kbank partnered with Ripple to test blockchain-based remittances.

In May, KB Financial Group completed a pilot covering stablecoin issuance, offline merchant payments and cross-border remittances through the Kaia blockchain. The group said it was preparing to introduce stablecoin services once the regulations take effect.