A digital financial layout aimed at dominating the Korean won stablecoin.

The acquisition plan of Dunamu, the parent company of South Korea's largest crypto assets exchange Upbit, by South Korean internet giant Naver, can indeed be seen as a strategic layout surrounding the dominance of the Korean won stablecoin. This transaction not only represents a deep integration of South Korea's technology and crypto industry but also reflects South Korea's ambition to seize monetary sovereignty in the global digital finance competition.

1. Core of the transaction: Equity swap and stablecoin binding

According to the latest news, Naver's fintech subsidiary Naver Financial has reached a comprehensive equity exchange agreement with Dunamu, through the issuance of new shares in exchange for Dunamu shareholders' shares, ultimately achieving the goal of making Dunamu a wholly-owned subsidiary of Naver Financial. This transaction is not merely a capital expansion, but is deeply tied to the stablecoin business:

• Integration of Technology and Traffic

As the fourth largest crypto exchange globally, Upbit processed over 50% of South Korea's cryptocurrency trading volume in the first quarter of 2025. Its user base complements the shopping, payment, and other life scenarios covered by Naver. For example, Naver Pay has an annual payment scale of 80 trillion won, and by integrating Upbit's trading functions, stablecoins can be directly embedded into high-frequency scenarios such as e-commerce settlements and cross-border remittances.

• Stablecoin First-Mover Advantage

Both parties announced their cooperation to develop a Korean won stablecoin as early as July 2025, and this acquisition further consolidates this layout. Naver plans to launch a stablecoin supported by Korean won reserves in partnership with Upbit and explore overseas markets. According to data from the Bank of Korea, in the first quarter of 2025, the outflow of stablecoins from Korean crypto exchanges reached 19.5 billion USD, with over 80% being USD stablecoins. The absence of local stablecoins has intensified the risk of capital outflow. Naver's move aims to seize the initiative in the issuance of Korean won stablecoins by controlling the traffic entry of the exchange.

2. Policy Driven: Compliance Game under Regulatory Framework

The South Korean government's regulatory attitude towards stablecoins has shifted from cautious to proactive, providing a policy window for Naver's layout:

• Legislative Breakthrough

In June 2025, the ruling party of South Korea proposed a draft of the "Basic Law on Digital Assets," allowing non-bank institutions to issue stablecoins, with the minimum registered capital reduced to 500 million won, and requiring a 1:1 reserve custody. If this bill is passed, South Korea will become the first major economy in Asia to open non-bank stablecoin issuance. Naver, as a technology giant with strong compliance, is expected to be one of the first companies to obtain a license.

• Regulatory Collaboration

The Financial Services Commission (FSC) of South Korea plans to submit regulatory guidelines for stablecoin in October 2025, clarifying the qualifications of issuers, reserve audits, and other requirements. Naver has acquired a 70% stake in the securities platform under Upbit, proactively laying out compliant infrastructure, such as introducing third-party custody and establishing a real-time reserve proof system to meet regulatory requirements.

• Central Bank Attitude Softens

Despite the concerns of the Bank of Korea regarding the impact of stablecoins on monetary policy, recent statements have leaned towards cooperation. The central bank is participating in the cross-border settlement project led by the BIS and has tacitly supported the priority pilot of stablecoins, providing implicit support for Naver's stablecoin project.

3. Competitive Landscape: The Struggle of Giants like Kakao

The South Korean stablecoin market is showing a competitive landscape among multiple giants, with the rivalry between Naver and Kakao being particularly intense:

• Kakao's layout

Kakao Pay has applied for multiple patents for the Korean won stablecoin and is collaborating with the public chain project Kaia, planning to promote the stablecoin through the 200 million users of the social platform LINE. Its stock price is expected to soar by 208% in 2025 due to the anticipation of the stablecoin, showing the market's optimism towards it.

• Naver's Differentiated Advantages

Unlike Kakao's reliance on social ecosystems, Naver can directly reach over 16.2 million crypto users in Korea by integrating the resources of the Upbit exchange. In addition, Naver's traffic entry points in search engines, e-commerce, and other areas can provide broader application scenarios for stablecoins. For example, users can directly use stablecoins for payments while shopping on Naver, eliminating the need to exchange for traditional currency and reducing transaction costs.

• Challenges of the Banking Alliance

South Korea's eight major banks (including Kookmin Bank, Shinhan Bank, etc.) plan to establish a joint venture to issue stablecoins and may obtain priority regulatory approval. This poses a potential threat to Naver, but its "payments + trading" closed loop formed through the acquisition of Upbit still has competitive barriers.

4. Risks and Uncertainties

Despite a clear strategy, Naver's stablecoin plan still faces multiple challenges:

• Regulatory implementation delay

The legislative process for stablecoin in South Korea is lengthy, with government proposals averaging 435 days for approval, and proposals from lawmakers taking even longer at 657 days. If the "Basic Law on Digital Assets" does not come into effect as expected before 2027, Naver's plans may be hindered.

• Reserve Asset Dilemma

The Korean won stablecoin requires a 1:1 reserve support, but the market size of South Korean short-term government bonds is only about 7 billion USD, far below the hundreds of billions in reserves of USD stablecoins. Naver may be forced to rely on alternative assets such as currency-stable bonds, but their yields are low (around 2%), which weakens the motivation for issuance.

• Technical and Compliance Risks

Stablecoins need to address issues such as smart contract vulnerabilities and poor reserve management. For example, USDC briefly depegged due to the Silicon Valley Bank incident, and Naver needs to establish a strict risk control system. In addition, South Korean regulations require that stablecoin trading be limited to users with real-name authentication, which may impact user growth.

5. Global Perspective: The Struggle for Digital Financial Sovereignty

Naver's acquisition plan is a microcosm of South Korea's participation in the global stablecoin competition:

• De-dollarization strategy

The South Korean government hopes to reduce dependence on USD stablecoins through the Korean Won stablecoin. In the first quarter of 2025, the trading volume of USD stablecoins on South Korean crypto exchanges reached 57 trillion Korean Won, accounting for over 80%, which exacerbates the difficulty of monetary policy regulation. If Naver's stablecoin is successful, it will provide new tools for South Korea in areas such as cross-border trade and foreign exchange reserve management.

• Benchmarking against the US regulatory framework

: The U.S. "Stablecoin Regulatory Act" requires issuers to hold hard currency reserves and accept federal oversight, and South Korea is following this model. Naver's compliance strategy (such as introducing BlackRock-style custodianship) shows its intention to align with international standards, paving the way for future expansion into overseas markets.

• East Asia Competitive Situation

Japan is promoting yen stablecoins through projects like JPYC, while Hong Kong is attracting businesses with the "Stablecoin Regulation." If South Korea can establish a complete ecosystem for the won stablecoin by 2027, it is expected to secure a place in the digital financial competition in East Asia.

Conclusion

The essence of Naver's acquisition of Upbit is to build a digital financial ecosystem centered around the Korean won stablecoin by integrating exchange traffic, payment scenarios, and policy resources. This strategy aligns with the South Korean government's policy direction towards de-dollarization and meets the market's demand for efficient and compliant stablecoins. However, issues such as regulatory delays and insufficient reserve assets remain significant obstacles. If Naver can complete its compliance layout and establish user habits before the legislative window in 2027, it is expected to become an important vehicle for South Korea's digital financial sovereignty and share in the global stablecoin competition.