a16z: South Korea's Crypto Market Moves to Stablecoins, RWA

South Korea’s crypto market is repositioning. The center of gravity is shifting from retail trading toward regulated stablecoin rails and real-world asset (RWA) tokenization, according to a June 25 report from a16z crypto research by analyst Sungmo Park.

The report argues that Korean banks, card networks, internet platforms, and brokerages are building partnerships and running pilots ahead of formal regulation. When the regulatory door opens, the core vendor and distribution relationships may already be locked in. Late entry becomes harder for both domestic and offshore players.

From 2017 through 2021, South Korea stood out for retail-driven trading cycles. Upbit and Bithumb listed tokens that became instant liquidity magnets. Speculative volume has cooled. a16z sees the missing activity replaced by a structural phase: large financial institutions and consumer platforms preparing rails for payments, settlement, issuance, and compliant token distribution.

The fight over a regulated won-denominated stablecoin sits at the center. The report frames the debate as two questions: whether South Korea will open a regulated market for KRW stablecoins, and who can issue them. Banks favor a bank-led model. Fintech and platform companies advocate an open structure. Regulators weigh innovation against monetary sovereignty and systemic risk.

The underlying pressure point is capital leaking into dollar-based stablecoins such as USDC. Korean users move funds to offshore venues for trading, remittances, and payments. Digital money activity then occurs outside domestic oversight. a16z calls the push for a regulated KRW stablecoin a defensive response – an attempt to keep flows anchored to the won and inside Korean institutions.

Several pilots are already running. KB Financial Group tested blockchain-based payment and remittance flows in early 2026, including QR payments at a Holly’s Coffee location and transfers to Vietnam. The remittance leg settled in under three minutes at costs 87% lower than SWIFT, the report says. Hana Financial Group tightened its strategic link to Upbit operator Dunamu and participates in a multi-institution stablecoin consortium using Dunamu’s GIWA network. Hana Card also ran a USDC payment pilot aimed at foreign visitors.

NH Nonghyup Bank is reviewing stablecoin-based merchant settlement with payments firm NHN KCP. Kbank, which serves as Upbit’s key partner bank, is exploring stablecoin wallet and remittance services, including potential collaboration with Ripple (XRP)-related counterparts, per the report.

Card networks are moving quickly. Shinhan Card is working with the Solana Foundation on stablecoin infrastructure for payments. With about 28 million members and annual transaction volume around 200 trillion won ($145 billion), the initiative looks like more than a tech demo. BC Card completed a two-month pilot letting foreign visitors use stablecoins at Korean merchants. The pilot integrated stablecoins into authorization and settlement layers and reduced some volatility and reconciliation frictions, the report notes.

Outside legacy finance, Danal operates the Paycoin network with about 3.2 million users and 150,000 merchants. It showed a KRW-linked Korean Stable Coin at Korea Blockchain Week 2025 and joined the Circle Alliance. The report stresses that distribution can be as important as issuing technology in stablecoins.

Consumer platforms may hold the adoption lever. KakaoPay and Naver Pay sit on high-frequency touchpoints across messaging, search, shopping, and financial services. a16z 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. Naver is preparing a structure that could bridge exchange liquidity and everyday payments through deeper integration with Dunamu.

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

Examples include Mirae Asset Securities reviewing ship-finance tokenization with Korea Land Trust. Hanwha Investment & Securities outlined plans tied to its group’s defense supply-chain assets. Story Protocol is working with Seoul Auction Blue on bringing creative IP and K-pop royalty streams on-chain – a move that could make South Korea a test bed for tokenizing cultural cash flows.

Regulatory work is moving in parallel. In early 2026, the National Assembly passed amendments to the Financial Investment Services and Capital Markets Act and the Electronic Securities Act, clearing a legal path for issuing tokenized securities. Full implementation is slated for early 2027. Market participants are already positioning as if token securities issuance will be a core capital markets feature, the report says.

On market infrastructure, preliminary approvals went to trading system platforms NXT and KDX. The Korea Exchange is preparing a complementary market for post-issuance liquidity. Shinhan Investment Corp. 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 expanding pipelines that include ship assets and IP-linked products.

NXT, which carries a Mixed Alpha Score of 49, is part of this exchange infrastructure buildout. Its stock page is available here: NXT stock page.

For crypto-native projects, the strategic takeaway is not just that institutions are coming – a16z says they already are – but that they are selecting external partners rather than building every layer themselves. Shinhan Card works with Solana. Avalanche hosts KRW1. LayerZero collaborates with Korea Gold Exchange and Nexpace. Kaia supports KB pilots. Fireblocks is part of NH Nonghyup Bank’s tokenization stack. BitGo established a Korean entity backed by investors including Hana Financial Group and SK Telecom. SK Telecom’s stock is tracked here: SKM stock page.

a16z stresses that successful market entry in South Korea depends less on head-to-head disruption and more on a support posture. Korean financial institutions already control asset structuring, compliance, and distribution channels. What they want from external blockchain projects is connective infrastructure that extends existing businesses, not replaces them.

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

Kakao could pursue a super wallet spanning KakaoBank, KakaoPay, and KakaoTalk, offering an integrated interface holding both fiat and stablecoins. Toss is building presence, having filed trademarks tied to KRW stablecoins and set up a dedicated blockchain organization. Banks and brokerages issue and warehouse assets. Platforms control the consumer entry point.

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