KRWQ launches as first Korean won stablecoin on Base

IQ, in partnership with Frax, announced Thursday that it has launched KRWQ, a stablecoin pegged to the South Korean won (KRW).

The two companies said in a press release that it is the first Korean won-pegged stablecoin on Coinbase's Ethereum Layer 2 Base, as they launched a KRWQ-USDC pair on Aerodrome.

KRWQ is also said to be the first won-pegged multichain token, as it uses LayerZero's Omnichain Fungible Token (OFT) standard and Stargate bridge to allow transfers across multiple blockchains.

“KRWQ fills a critical gap in the market," said Navin Vethanayagam, Chief Brain of IQ. "While USD-backed stablecoins dominate today, no credible won-denominated stablecoin has ever launched at scale."

IQ announced it is bringing Frax's expertise in regulatory compliance, specifically with frxUSD, to the design of KRWQ to support institutional adoption and due diligence.

Not offered in Korea

Meanwhile, KRWQ is not yet marketed or offered to South Korean residents, as local efforts to establish fundamental rules on stablecoins are still underway. Minting and redemption of the stablecoin is also limited to eligible counterparties such as exchanges, market makers, and institutional partners.

"KRWQ is designed to be the first fully regulatory compliant stablecoin in Korea, developed in anticipation of the forthcoming stablecoin legislation currently under review in the Korean National Assembly," IQ wrote in the press release.

Last month, South Korean custody service provider BDACS said it launched the country's first won-pegged stablecoin KRW1 on Avalanche, noting that it remains at the proof-of-concept stage as local regulations are yet unclear.

Since the election of pro-crypto President Lee Jae Myung in June, South Korea has been pushing to develop a local currency-pegged stablecoin market, mainly to strengthen its monetary sovereignty in the age of digital finance.

As local lawmakers and financial authorities formulate regulations for won stablecoins, major banks and institutions are simultaneously preparing stablecoin ventures by forming partnerships and reserving ticker symbols.

However, debate continues as the Bank of Korea insists that stablecoin issuance should only be limited to regulated banks, while the private sector argues that non-bank entities should also be allowed to issue stablecoins to foster competition and innovation in the market.