Kakao Group has partnered with stablecoin issuer Circle to explore payment infrastructure for win-backed stablecoins as South Korea prepares a broader regulatory framework for crypto assets.

On Thursday, companies announced that Kakao, Kakao Pay and Kakao Bank have signed a strategic memorandum of understanding (MOU) with Circle Internet Group. Under the agreement, the companies will explore ways to connect Circle’s blockchain and global payments infrastructure with Kakao’s consumer platforms and financial services.

The agreement highlights that major South Korean consumer and financial platforms are ahead of expected stablecoin regulations, even before the regulatory framework is finalized.

Under the MoU, the companies plan to explore stablecoin payments, cross-border remittances, trade settlements and connections between existing financial systems and blockchain networks.

The companies will also consider support for tokenized financial services, but have not revealed any products or launch timeline.

Cointelegraph reached out to Circle and Kakao Group but did not receive a response prior to publication.

South Korea stablecoin structure

South Korea is working on regulations to regulate winnings-based stablecoins as policymakers seek to encourage innovation in digital payments while also addressing risks related to reserves, redemption and issuer oversight.

The government is preparing a bill that would set requirements for stablecoin issuance, collateral management and internal controls. Lawmakers have also introduced competing proposals as support for won-pegged tokens increases that aim to reduce reliance on the US dollar.

However, the regulatory process has stalled due to disagreements over which institutions should be allowed to issue won-based stablecoins.

The Bank of Korea, the country’s central bank, argued that banks should retain majority ownership in stablecoin issuers, while the Financial Services Commission cautioned that eligibility limits could limit competition and innovation.

In its economic growth strategy announced on July 14, the government listed include the basic law on digital resources among its priorities for the second half of 2026.

Related: South Korean regulator misses stablecoin bill deadline: what’s next?

Meanwhile, companies and financial institutions have started testing the technology in South Korea. In April, online bank Kbank partnered with Ripple to test blockchain-based money transfers.

In May, KB Financial Group completed a pilot involving stablecoin issuance, offline merchant payments and cross-border transfers via the Kaia blockchain. The group said it is preparing to launch stablecoin services once the regulations come into effect.

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