Stablecoin major Circle unveiled the testnet of its first Layer-1 blockchain dubbed Arc this week. Following Circle’s announcement, South Korean publications reported that native Web3 player BDACS is likely to tap Arc to power its first won-backed stablecoin called “KRW1”.
BDACS is a crypto custodian that has reportedly signed a memorandum of understanding (MoU) with Circle to cement the collaboration.
“By deploying KRW1 on Circle’s Arc, we are opening a gateway for Korean companies to participate in the global stablecoin network,” Yonhap News Agency quoted Ryu Hong-yeol, CEO of BDACS as commenting on the development.
Elaborate details on the development remain awaited for now along with a public confirmation from BDACS and Circle.
Stablecoins are crypto tokens that are pegged to fiat currencies and maintain 1:1 ratio with their underlying fiats. Tether and USDC are the top two stablecoins, both pegged to the US dollar. These tokens can be used to process efficient and quick financial transactions on-chain.
South Korea’s Financial Services Commission (FSC) is working to finalize and implement a stablecoin legal framework. In a bid to defend the Korean currency against the growing dominance of the dollar, key domestic banks said in June that they will work together to develop a won-pegged stablecoin, which is anticipated to emerge by late 2025 or early 2026.
As per Circle, Arc has been built to process tasks around asset lending, global payments,foreign exchange, and capital markets. It brings features like dollar-based fees, sub-second transaction finality, and opt-in configurable privacy to the table for developers to work with.
Over a hundred companies have agreed to be part of Arc trials including Deutsche Bank, Emirates NBD, HSBC, BlackRock, Amazon Web Services, and Standard Chartered among others.