First Korean Won Stablecoin Issued
As reported in ZDNet Korea this morning in Seoul, KRWb, the first stablecoin pegged 1:1 to the value of the Korean Won, has been officially released by BXB Inc. 400 million KRWb coins have been released valued at a total of 400 million KRW.
BXB Inc. issued the coins following a thorough legal review to ensure that the coin would not be interpreted as a security. KRWb will be listed on Korean cryptocurrency exchange coblIck and global exchange BEQUANT at an undisclosed time in the coming weeks. The KRWb whitepaper outlines how the coin is a ‘KRW margin utility token’ which may function as a stablecoin.
Eugene Investent & Securities performed a formal audit on the coins after the entire supply of the coins were deposited into their accounts at Eugene Accounting Corporation. The audit report is available to the public.
In order to prevent illegal possession of capital per Korean law, BXB adopted a way to make market makers KRWb ‘supply partners’. Supply partners enter into a lender contract with BXB. Then the supply partners deposit KRW in a designated financial institution in order to receive an equivalent amount of KRWb in return which they can use to buy or sell.
Under such an arrangement, the right to the return of the KRW will only be provided by BXB and its supply partners, which are the parties to the lending contract. By using KRW as collateral for KRWb, the coin was not considered a security.
Jiho Kang, a representative partner of BXB, explained, “We chose this method after a long legal review to issue a staple-denominated stowaway policy in a manner not covered by securities.”
Mr. Kang continued, “We do not have the right to charge a debt repayment solely by token holding, nor guarantee the KRW repayment in any form.”
The KRWb appears to be a tool only for market makers rather than retail investors although a representative from BXB has refuted this. It is possible that other cryptocurrency exchanges may utilize the coin for pairs in the future, but they would have to interact with BXB Inc. to secure such an agreement.
