LG CNS Drives Innovation in KRW-based Stablecoins and Digital Payments

Stablecoins are emerging as a transformative force in global finance, reshaping how payments and asset transactions are made. With this momentum, LG CNS has revealed a strategy to integrate a Korean won (KRW)-based stablecoin into South Korea's payment infrastructure. By blending Central Bank Digital Currency (CBDC) frameworks with deposit token solutions, the company envisions establishing a pioneering digital financial ecosystem in South Korea.

The Growing Influence of Stablecoins

At "Block Festa 2025" on October 26, held in Samsung-dong, Seoul, Jung-hwa Lee, head of the Digital Trust Service Team at LG CNS, underscored the immense potential of stablecoins. Globally, stablecoins—predominantly dollar-based—are becoming indispensable tools in cross-border remittances, international trade payments, and asset tokenization settlements. Lee pointed out an even greater reliance on dollar stablecoins in some emerging markets, where they act as substitutes for unstable local currencies.

Acknowledging these trends, Lee emphasized the need for South Korea to prepare for the stablecoin revolution. She advocated for a KRW-based stablecoin to become the dominant settlement method in the nation's payment systems. “It’s critical for South Korea to stay ahead in this shift, ensuring the Korean won-based stablecoin functions effectively as the foundation for domestic transactions,” Lee remarked.

Addressing Infrastructure Challenges for KRW Stablecoins

Adapting South Korea’s financial systems to a KRW-based stablecoin ecosystem comes with challenges. Robust infrastructure is essential to ensure smooth adoption and usability. Lee emphasized the importance of trust and reliability for wallets and exchange platforms that support stablecoin transactions:

• Service-Oriented Wallets: Digital wallets must transition from mere storage tools to versatile, service-ready platforms equipped for diverse payment demands.
• Regulatory Clarity: Financial institutions should be empowered to participate directly by offering wallets and related services, supported by well-defined regulations and security frameworks.

“Confidence in wallets and exchange systems, along with clear regulatory frameworks, is the backbone for any stablecoin's integration into existing financial systems,” Lee explained.

Leveraging CBDCs as a Catalyst

A critical component of Lee’s proposal is integrating CBDC technology with stablecoins to enhance stability, security, and global relevance. “A successful on-chain payment system must achieve a balance between decentralized innovation and the regulatory compliance required in finance,” Lee stated. She emphasized that combining stablecoins with CBDCs would create a more competitive and efficient financial ecosystem.

One potential framework suggested by Lee involves enabling commercial banks to issue deposit or e-money tokens backed by CBDC reserves. Blockchain networks would process transactions and settlements in real-time, ensuring efficiency and scalability. Deposit tokens, Lee argued, could bridge the gap between traditional cash stability and the need for faster, tech-forward payment systems in a blockchain era.

“By using CBDC reserves as the foundation, private entities issuing stablecoins gain access to both the regulatory safeguards of fiat currency and the technological scalability of blockchain,” she added.

Demonstrated Expertise in CBDC Innovations

LG CNS’s readiness to lead this transformation stems from firsthand expertise in developing CBDC prototypes. The company participated in the Bank of Korea’s "Project Han River," a groundbreaking pilot project testing CBDC applications. Through this program, LG CNS created a distributed ledger technology (DLT) platform capable of handling real-world transactions, integrating CBDC issuance with private digital currency models.

“We successfully demonstrated how traditional financial systems’ security practices can be combined with blockchain,” Lee highlighted, underlining LG CNS’s ability to navigate the complexity of merging institutional-level safeguards with cutting-edge technology.

Monachain: The Foundation for Stablecoin Development

The company's proprietary blockchain platform, Monachain, plays a crucial role in its plans to commercialize stablecoins. Designed to support the entire stablecoin lifecycle, Monachain facilitates everything from issuance to wallet custody and exchange services.

Commenting on Monachain’s potential, Lee said, “Using Monachain, we are equipped to handle every stage of stablecoin integration. Our experience in regulatory compliance, along with proven blockchain security, positions us to scale these innovations commercially.”

With Monachain and its CBDC pilot success, LG CNS aims to set the gold standard for the rollout of KRW-based stablecoins. By taking an integrated, security-first approach, the company not only seeks to revolutionize domestic financial systems but also capitalize on the rapid evolution of global digital payment ecosystems.

Driving the Global Financial Evolution

LG CNS’s strategic focus on KRW-based stablecoins and CBDC integration highlights its ambition to lead in digital finance innovation. As stablecoins and blockchain applications continue to disrupt traditional finance, LG CNS is committed to ensuring South Korea remains competitive in the global financial landscape.

From infrastructure challenges to regulatory requirements, LG CNS is addressing every facet needed to enable widespread adoption of stablecoins. Its work signals not just an upgrade for South Korea’s payment systems but a pivotal step towards aligning the nation with global digital economy trends.