Key Notes
- Avalanche has now become host to the first Korean won–backed stablecoin dubbed KRW1.
- The stablecoin is fully collateralized with Korean won deposits held at Woori Bank.
- In the meantime, the stablecoin is not included in circulation, but in the PoC phase.
Popular South Korean digital asset custodian BDACS has officially rolled out the first won-backed stablecoin on Avalanche. According to the blockchain, this digital asset, dubbed KRW1, is fully collateralized with Korean won deposits held at Woori Bank. It is worth noting that the stablecoin is yet to be fully circulated.
BDACS Targets Global Stage with KRW1 Stablecoin
In the post, Avalanche clearly stated that “Every KRW1 is backed 1:1 with won held in escrow at Woori Bank,” which ranks amongst the top financial institutions in South Korea.
In a press release , BDACS noted that this launch follows the successful completion of the stablecoin’s full Proof of Concept (PoC). This phase was conducted to ascertain the technical viability of KRW1. BDACS is keen on leveraging Woori Bank’s real-time banking API integration. The custodian is confident in its capacity to promote transparency and offer verifiable Proof-of-Reserve (PoR).
“The launch extends far beyond token issuance,” according to the press release. “BDACS has developed a comprehensive framework, including issuance and management systems as well as a user-facing app supporting peer-to-peer transfers and transaction verification.”
In the long term, BDACS’s goal is to position the stablecoin among assets that are utilized for payments, remittances, investments, and deposits globally. At a later time, KRW1 may be deployed in public-sector applications such as settlement systems for emergency relief disbursements.
Avalanche’s Reputation with Stablecoins
The decision to explore the Avalanche blockchain comes from a recognition of the network’s reliability and security in public-sector use.
In the past, other projects like Circle and Defrost Finance have also utilized the decentralized open-source Proof-of-Stake (PoS) network for their stablecoin launch. They relied on the blockchain’s capacity to deliver prompt and efficient payments and financial services
Despite these accolades for Avalanche, BDACS has plans to extend the KRW1 stablecoin to other blockchains in a bid to facilitate interoperability. Also, BDACS is mulling the thoughts of collaborating with USD-pegged stablecoins like USDC USDC $1.00 24h volatility: 0.0% Market cap: $73.47 B Vol. 24h: $30.90 B and USDT USDT $1.00 24h volatility: 0.0% Market cap: $171.18 B Vol. 24h: $139.19 B .
Stablecoin Economy in South Korea
In recent times, South Korea has been quite strategic about the use of stablecoins in its jurisdiction. Three months ago, Min Seok, a lawmaker from the Democratic Party in the region, introduced a bill that includes a new licensing regime for stablecoins.
With so much confidence, Seok noted that the Digital Asset Basic Act bill will be instrumental in getting South Korea to excel in the global digital economy. On the heels of protecting investors and their assets, issuers are expected to attain over 500 million Korean won, equivalent to $367,890, in owners’ capital.
This improved stablecoin regulatory ecosystem has made the digital asset industry more attractive to Traditional Finance (TradFi) firms. In August, KakaoBank, South Korea’s largest digital-only bank, hinted at its plan to enter the stablecoin market . Even South Korea’s Financial Services Commission is working on submitting a won stablecoin bill to parliament in October.
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