KRWQ Stablecoin Enters South Korea's Market Amid Money Laundering Concerns

A new stablecoin pegged to the Korean won, called KRWQ, has been making its way into South Korea's financial market despite regulatory hurdles.

KRWQ is an offshore won coin issued abroad and designed to maintain a value equivalent to one Korean won. Its reserves include not only dollar stablecoins USDC and frxUSD but also Korean government bonds held indirectly through tokenized products from Shinhan Securities.

The coin has been used for buying mobile gift cards from about 90 domestic brands, including Olive Young, Daiso, and Paris Baguette. Users can purchase these gift cards without undergoing the Know Your Customer (KYC) verification process, raising concerns over money laundering.

KRWQ is also being used for tokenized stock trading through Grow, a global investment platform. Users can deposit KRWQ to invest in tokenized assets such as U.S. stocks, ETFs, and commodities, as well as cryptocurrencies. This allows users to easily invest in overseas assets without exchanging into dollars or sending money abroad.