South Korea’s Crypto Market Shifts Toward Stablecoins, RWA Infrastructure: a16z

South Korea’s crypto market may look quiet on the surface, but a ‘silent reshuffle’ is already underway—one that is shifting the industry’s center of gravity from retail trading to regulated ‘stablecoin’ rails and real-world asset (RWA) tokenization infrastructure, according to a new report from a16z crypto research.

The report, based on research written by analyst Sungmo Park and dated June 25, argues that Korean banks, card networks, internet platforms, and brokerages are building partnerships and running pilots well ahead of full regulatory clarity. The key implication is that when the regulatory door opens, the core vendor and distribution relationships may already be locked in, making late entry significantly harder for both domestic and offshore players.

From 2017 through 2021, South Korea stood out globally for its retail-driven trading cycles, with listings on dominant exchanges such as Upbit and Bithumb widely viewed as a gateway to liquidity and brand recognition. While speculative volume has cooled compared with prior peaks, a16z crypto research sees the “missing activity” being replaced by a more structural phase: large financial institutions and consumer platforms are preparing the rails for payments, settlement, issuance, and compliant token distribution.

At the center of that shift is the fight over a regulated won-denominated stablecoin. The report frames the debate as two questions: whether South Korea will open a regulated market for Korean won stablecoins, and who should be allowed to issue them. Banks, the report says, tend to favor a bank-led model, while fintech and platform companies advocate an open, competitive structure. Regulators, meanwhile, are weighing innovation against monetary sovereignty and systemic risk.

The underlying pressure point is capital and activity leaking into dollar-based stablecoins such as USD Coin (USDC). As Korean users move funds to offshore venues and dollar stablecoins for trading, remittances, and certain payment flows, parts of digital money activity occur outside domestic financial oversight. a16z crypto research characterizes the push for a regulated KRW stablecoin less as a product race and more as a ‘defensive response’—an attempt to keep digital money flows anchored to the won and within Korean institutions and rules.

Even if many initiatives remain pilots, the report highlights a growing list of real-world experiments across banking and payments. KB Financial Group is cited for early-2026 testing of blockchain-based payment and remittance flows, including QR payments at a Holly’s Coffee location and transfers to Vietnam. The remittance leg reportedly settled in under three minutes with costs 87% lower than SWIFT, underscoring—if validated at scale—that blockchain rails can compete on settlement speed and unit economics for certain corridors.

Hana Financial Group, the report notes, tightened its strategic linkage to Upbit operator Dunamu via an investment and is participating in a multi-institution stablecoin consortium pursuing remittance tests on Dunamu’s proprietary network GIWA. Hana Card has also been running a USDC payment pilot aimed at foreign visitors. NH Nonghyup Bank is reviewing stablecoin-based merchant settlement with payments firm NHN KCP, a use case that—if operationalized—could bring stablecoins directly into everyday commerce back-office flows rather than limiting them to crypto exchanges.

Kbank, which serves as Upbit’s key partner bank, sits at the intersection of retail crypto activity and traditional banking. a16z crypto research says the lender is exploring stablecoin wallet and remittance services, including potential collaboration with Ripple (XRP)-related counterparts—an example of how exchange-adjacent banks could become distribution channels for regulated on-chain money products.

Card networks are moving quickly as well. Shinhan Card is working with the Solana Foundation on stablecoin infrastructure for real-world payments. With roughly 28 million members and annual transaction volume around 200 trillion won (about $145 billion), Shinhan Card’s scale suggests the initiative is designed to be more than a tech demo. BC Card, according to the report, completed a two-month pilot enabling foreign visitors to use stablecoins at Korean merchants. By integrating stablecoins into authorization and settlement layers, the pilot reportedly reduced some volatility and reconciliation frictions that typically complicate consumer-grade crypto payments.

Outside legacy finance, the report points to Danal as a notable distribution player. Danal operates the Paycoin network with around 3.2 million users and 150,000 merchants. It showcased a KRW-linked “Korean Stable Coin (KSC)” at Korea Blockchain Week 2025 and joined the Circle Alliance, highlighting a theme the report emphasizes: in stablecoins, winning ‘distribution’ can be as important as issuing technology.

Consumer platforms may ultimately hold the adoption lever. KakaoPay and Naver Pay already sit on high-frequency consumer touchpoints across messaging, search, shopping, and financial services. a16z crypto research argues these platforms can acquire wallet-style interfaces and repeat usage at far lower marginal cost than banks. KakaoPay has described KRW stablecoins as a second growth driver for overseas expansion, while Naver is portrayed as preparing a structure that could bridge exchange liquidity and everyday payments through deeper integration with Dunamu.

Beyond stablecoins, the report assigns substantial weight to South Korea’s RWA tokenization pipeline. While the market remains in sandboxed pilots, a16z crypto research sees institutional intent running ahead of regulation. Unlike the U.S. RWA narrative, which has centered heavily on tokenized Treasuries and private credit, the report argues that South Korea is expanding tokenization candidates across real estate, bonds, gold, carbon credits, short-term debt, and more bespoke verticals such as ship finance, defense supply-chain assets, and K-pop royalty and creative IP.

Examples cited include Mirae Asset Securities reviewing ship-finance tokenization with Korea Land Trust and HJ Shipbuilding & Construction, and Hanwha Investment & Securities outlining plans tied to its group’s defense supply-chain assets. Story Protocol is also highlighted for working with Seoul Auction Blue on bringing creative IP and K-pop royalty streams on-chain—an approach that, if executed, could make South Korea a test bed for tokenizing cultural and media cash flows rather than only traditional balance-sheet assets.

Regulatory work is moving in parallel. In early 2026, South Korea’s National Assembly passed amendments to the Financial Investment Services and Capital Markets Act and the Electronic Securities Act, clarifying a legal path for issuing tokenized securities. Full implementation is slated for early 2027, limiting near-term expectations for mass-market trading volumes, but the report argues that market participants are already positioning as if token securities issuance will be a core capital markets feature.

On market infrastructure, the report notes preliminary approvals for trading system platforms NXT and KDX, while Korea Exchange is preparing a complementary market to handle post-issuance liquidity. Shinhan Investment Corp. is presented as an early leader, having completed 10 investment contract securities issuances in 2025 and organized a consortium of more than 50 companies around NXT. NH Investment & Securities and Mirae Asset Securities are also expanding pipelines that include ship assets and IP-linked products.

For crypto-native projects, the strategic takeaway is not simply that institutions are coming—because, the report argues, they already are—but that they are selecting external partners rather than building every layer themselves. The report points to partnership signals such as Shinhan Card’s work with the Solana Foundation, hosting of Avalanche-based KRW1, LayerZero collaborations with Korea Gold Exchange and Nexpace, and Kaia’s support for KB pilots. In custody and institutional plumbing, Fireblocks is said to be part of NH Nonghyup Bank’s tokenization stack, while BitGo has established a Korean entity backed by investors including Hana Financial Group and SK Telecom—moves that suggest structural integration is happening before final rules are fully in place.

a16z crypto research stresses that successful market entry in South Korea may depend less on head-to-head disruption and more on a ‘support’ posture. Korean financial institutions already control asset structuring, compliance, and distribution channels, the report says; what they want from external blockchain projects is connective infrastructure that extends existing businesses rather than replaces them.

In RWA tokenization specifically, the report identifies three opportunity gaps: global distribution channels that can connect Korean tokenized assets to offshore liquidity and investors; deeper liquidity and cross-chain interoperability; and infrastructure that complements institutional workflows. On the consumer side, platforms could become the gatekeepers of mass adoption. The report highlights that Naver has officially moved to acquire Dunamu, potentially combining Naver Pay’s roughly 34 million users with Upbit’s exchange infrastructure. With Dunamu building GIWA as an OP Stack-based layer-2 and Naver developing wallet infrastructure, the pieces exist—at least in theory—to unify trading and payments into a single on-chain flow.

Kakao, the report adds, could pursue a ‘super wallet’ spanning KakaoBank, KakaoPay, and KakaoTalk, potentially offering an integrated interface holding both fiat and stablecoins. Toss is also building presence, having filed trademarks tied to KRW stablecoins and set up a dedicated blockchain organization. The emerging division of labor is clear: banks and brokerages issue and warehouse assets, while platforms may control the consumer entry point.

The core question for South Korea’s next crypto phase, a16z crypto research concludes, is no longer whether regulated finance will adopt blockchain—but which chains, wallets, custodians, payment networks, and tokenization protocols will become embedded into that institutional architecture. For projects that establish relationships and demonstrate real usage now, the report suggests, the current reshuffle could determine who becomes foundational infrastructure for South Korea’s stablecoin and RWA era.