KakaoPay, a South Korean mobile payment platform, has experienced a surge in its stock value, increasing over 200% in the past month.

This rise is linked to speculation regarding potential stablecoin developments associated with the company.

The stock price rose from 30,800 Korean won (US$22.25) on May 23 to 94,700 won (US$68.60) as of June 23, according to Google Finance.

Shares rose by 17.3% during market trading on June 23, 2025, morning. The increase in KakaoPay’s stock began after President Lee Jae Myung expressed support for local stablecoin initiatives in partnership with the private sector.

Additionally, a South Korean lawmaker proposed legislation to speed up the approval process for Korean won-backed stablecoins.

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🔗 Source: The Block

🧠 Food for thought

1️⃣ South Korea pivots from crypto caution to strategic stablecoin adoption

South Korea’s stablecoin push represents a significant policy shift from previous conservative positions on digital currencies.

In 2019, the Bank of Korea explicitly stated it had “no immediate plans” to issue a Central Bank Digital Currency, arguing that existing payment systems were sufficient1.

This cautious approach has now evolved into active promotion, with newly elected President Lee Jae Myung pledging government support for local currency-backed stablecoins and lawmakers proposing legislation to fast-track their approval.

The Digital Asset Basic Act, currently under consideration, establishes a structured regulatory environment with specific provisions for stablecoin issuers, including a licensing system requiring minimum capital of 500 million won (approximately $367,890)2.

This evolution reflects global trends where central banks have moved from skepticism to engagement with digital currencies, recognizing their strategic importance in maintaining financial sovereignty and competitiveness.

2️⃣ KakaoPay’s business model creates natural stablecoin advantages

KakaoPay’s existing infrastructure gives it a significant competitive edge in South Korea’s emerging stablecoin landscape.

The company’s top-up wallet system, holding approximately $429 million in advance payment balances from users, provides natural collateral for stablecoin issuance—a critical requirement for regulatory compliance.

KakaoPay’s parent company Kakao already possesses cryptocurrency expertise through its fintech subsidiary Dunamu, which operates Upbit, one of South Korea’s dominant exchanges with a user-friendly interface and extensive cryptocurrency offerings3.

The company’s forward-thinking approach is further evidenced by its filing of six different stablecoin patent applications—PKRW, KKRW, KRWP, KPKRW, KRWKP, and KRWK—covering electronics, financial services, and IT development categories.

3️⃣ South Korea charts middle path in global stablecoin regulation

South Korea’s regulatory approach to stablecoins positions it between the more permissive U.S. framework and restrictive European regulations.

The U.S. SEC has clarified that fully collateralized stablecoins are not classified as securities, allowing issuers to operate without registration if they meet transparency and reserve requirements4.

In contrast, Europe’s MiCA regulation imposes strict limits, including a ban on interest and a daily issuance cap, with requirements for reserves to be held in EU banks—restrictions that could hinder liquidity and innovation4.

South Korea’s proposed framework seeks balance through tailored legislation that addresses consumer protection and financial stability while creating a supportive environment for won-backed stablecoins.

This middle path could give South Korean companies like KakaoPay a competitive advantage in the global digital currency landscape, especially as the proposed Digital Asset Committee under presidential oversight aims to provide centralized guidance while preventing regulatory fragmentation2.

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