IQ and Frax launch KRWQ – the first stablecoin pegged to the Korean won on Base

IQ has partnered with Frax to announce the launch of KRWQ, the first stablecoin pegged to the South Korean won (KRW) on the Base (Layer 2 network of Coinbase). The trading pair KRWQ/USDC is now listed on the decentralized exchange Aerodrome.

KRWQ is built according to the Omnichain Fungible Token (OFT) standard of LayerZero, allowing asset transfers across multiple blockchains via the StarGate bridge – making it the first stablecoin pegged to the won with multi-chain capabilities.

IQ states that KRWQ has been developed with the support of Frax for regulatory compliance, aiming for a high level of institutional acceptance and full legal compliance when the stablecoin law in South Korea is passed.

Currently, KRWQ is not available for users in South Korea, as the domestic legal framework for stablecoins is still being refined. The issuance and redemption of KRWQ is only for qualified partners, such as exchanges, market makers, and financial institutions.

Previously, another stablecoin called KRW1 developed by the custody company BDACS on Avalanche was also introduced, but it is still in the testing phase due to unclear domestic regulations.

The launch of KRWQ takes place against the backdrop of the South Korean government, under President Lee Jae Myung, promoting the domestic stablecoin market to enhance digital currency sovereignty, while the Bank of Korea continues to argue that only licensed banks should be allowed to issue stablecoins.