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Crypto protocol Frax and AI agent platform IQ have announced the launch of won-pegged KRWQ, the first fully-backed South Korean won stablecoin to debut on the Base blockchain as a network incubated by Coinbase.
The new won-pegged KRWQ token, unveiled Thursday, was launched alongside a USDC trading pair on Aerodrome, allowing seamless exchange between the South Korean won and the U.S. dollar stablecoin.
According to the joint statement shared with Cointelegraph, KRWQ also functions as a multichain asset, utilizing LayerZero and Stargate Finance infrastructure for cross-chain transfers across multiple networks.
“This marks a key milestone for stablecoin diversity and accessibility in decentralized finance,” — Navin Vethanayagam, Co-founder, IQ, said. “The won-pegged KRWQ fills a crucial gap in the market. While USD-backed stablecoins dominate, there has never been a credible, scalable won-denominated stablecoin until now.”
The rollout underscores the growing momentum in Asia’s stablecoin ecosystem, particularly as South Korea works to establish a comprehensive framework for digital assets and won-pegged KRWQ positions itself at the intersection of innovation and compliance.
South Korea’s push toward digital currency regulation has been steadily advancing, led by the Bank of Korea (BoK) and the Financial Services Commission (FSC). The government is exploring guidelines that would allow local banks to play a central role in issuing and managing stablecoins including tokens such as the won-pegged KRWQ.
However, this approach has faced industry criticism from blockchain leaders who argue that centralizing issuance through banks may limit innovation.
By launching the won-pegged KRWQ abroad on the Base blockchain, Frax and IQ appear to be pre-empting local regulation, offering a compliant infrastructure that aligns with the Bank of Korea’s ambitions while remaining accessible to global DeFi participants.
The duo emphasized that the won-pegged KRWQ token has been developed “in anticipation of forthcoming stablecoin legislation” and is not currently marketed to South Korean residents. Instead, the asset is intended for international DeFi applications, with minting and redemption restricted to eligible KYC-verified counterparties, including exchanges, market makers, and institutional partners.
Frax and IQ have designed won-pegged KRWQ to meet evolving compliance standards, ensuring it remains adaptable to South Korea’s upcoming Digital Asset Framework Act, expected to enter review later this year.
The stablecoin’s fully-backed model seeks to build market trust while addressing key concerns around transparency and liquidity that have plagued earlier algorithmic or partially collateralized models.
The collaboration between Frax known for its stablecoin innovation and IQ is a platform specializing in AI-driven blockchain automation highlights the convergence of smart finance and regulatory foresight. The won-pegged KRWQ will be monitored and governed under transparent on-chain mechanisms, ensuring accountability for institutional stakeholders.
“Regulatory clarity is no longer optional,” said Sam Kazemian, Founder of Frax Finance, during a separate statement. “Our work with IQ on won-pegged KRWQ aligns with how global regulators, including those in South Korea, envision responsible stablecoin adoption that complements existing financial systems.”
The debut of won-pegged KRWQ comes just one day after BDACS, a South Korean crypto custodian, revealed plans to issue its own KRW1 stablecoin on Circle’s Arc blockchain. The KRW1 token first launched on Avalanche last month following a successful proof-of-concept with Woori Bank, one of the country’s largest financial institutions.
This flurry of stablecoin activity illustrates how South Korea is fast becoming a testing ground for currency-backed digital assets. As stablecoin usage expands globally with USD, EUR, and now KRW-based tokens entering DeFi ecosystems as the won-pegged KRWQ offers a new bridge for cross-border liquidity and DeFi innovation.
Analysts suggest that if the won-pegged KRWQ gains traction, it could pave the way for regional fiat-backed tokenization, allowing businesses to transact seamlessly in local currencies while accessing global decentralized finance networks.
The introduction of won-pegged KRWQ represents a strategic fusion of regulatory readiness, technological innovation, and market demand. Its multichain design, integration with global liquidity pools, and compliance-oriented framework may position it as a blueprint for other non-USD stablecoins entering decentralized markets.
As South Korea refines its stance on digital asset oversight, the won-pegged KRWQ stands as a case study in how blockchain projects can balance global expansion with regulatory prudence, advancing a future where national currencies are digitized for the open financial web.
