Crypto protocol Frax and AI agent platform IQ have partnered to launch a Korean won stablecoin on the Coinbase-linked Base blockchain.
In a statement viewed by Cointelegraph on Thursday, the two companies announced the launch of KRWQ, the first fully-backed won stablecoin on Base. Alongside this, they introduced a trading pair with the US dollar stablecoin USDC (USDC) on the Aerodrome exchange.
KRWQ is claimed to be the first multichain won-denominated stablecoin, as the token can be transferred across multiple networks. This is made possible through services provided by crosschain protocols LayerZero and Stargate Finance.
South Korea has been ramping up its ambitions for local currency stablecoins, with plans to establish a regulatory framework for these tokens. The Bank of Korea is actively pushing for the banking sector to lead their rollout.
However, the central bank’s push has faced some resistance from the crypto community. Dr. Sangmin Seo, chair of the Kaia DLT Foundation, recently told Cointelegraph that the central bank should set clear rules for stablecoin issuers that help “minimize monetary risks and foster innovation.”
“KRWQ fills a critical gap in the market. While USD-backed stablecoins dominate today, no credible won-denominated stablecoin has ever launched at scale,” said IQ co-founder Navin Vethanayagam.
Frax and IQ emphasized that KRWQ was designed to be fully regulatory-compliant in South Korea. The stablecoin was developed in anticipation of forthcoming stablecoin legislation currently under review by the country’s national legislature.
Despite this, the duo clarified that KRWQ is not being marketed or offered to South Korean residents at this time. Instead, it is intended for use in global DeFi markets, as lawmakers continue to discuss regulations around stablecoins.
Minting and redemption of KRWQ are limited to “eligible KYC’d counterparties,” which include exchanges, market makers, and integrated institutional partners.
KRWQ’s launch follows closely after South Korean crypto custodian BDACS announced plans to issue its own won-backed stablecoin called KRW1 on Circle Internet Group’s new blockchain, Arc.
BDACS’ stablecoin initially went live on the Avalanche blockchain last month, following a proof-of-concept conducted with Woori Bank.
This surge in activity highlights South Korea’s growing focus on stablecoins and their potential role in both domestic and global financial markets.
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