Naver Financial to launch local stablecoin wallet amid Upbit merger: report

Naver Financial, the fintech division of South Korea's tech behemoth Naver, is launching a wallet service for a local stablecoin project in Busan, the country's second-largest city.

Seoul Economic Daily reported Tuesday that Naver Financial has completed the development of a stablecoin wallet project, which is in its final verification stage. The project is developed in collaboration with Korean venture capital firm Hashed and the Busan Digital Asset Exchange (BDAN), and is scheduled to launch next month.

The stablecoin wallet project is designed for Busan residents and tourists visiting the city. The wallet will allow users to exchange various fiat currencies into the regional currency, "Dongbaek-jeon," in the form of a stablecoin.

Dongbaek-jeon is an existing regional currency payment system, currently operating like a credit card that offers cashback benefits to local residents. The Busan city government launched the original program to protect and revitalize local commerce and economy by promoting spending.

BNK Busan Bank, which currently issues the currency, has started research on transitioning the currency from a prepaid point system to stablecoins, the report said. The "Dongbaek-jeon" currency has a monthly average user count of 1.5 million, according to the report.

Naver Financial reportedly plans to link the upcoming wallet service with its existing crypto wallet service, Naver Pay Wallet. However, the wallet service's full functionality will likely remain locked until South Korea establishes a regulatory framework for local currency-pegged stablecoins, the report said.

The project commenced development in May, with Hashed and BDAN providing the technological infrastructure, and Naver utilizing its established payment systems to activate the wallet.

Meanwhile, Naver is reportedly in the process of a merger with Dunamu, the company behind South Korea's largest cryptocurrency exchange Upbit, through a stock-swap transaction. Once the transaction is completed, Dunamu would then plan to go public on the Nasdaq as a wholly-owned subsidiary of Naver, according to local news reports.

Naver, which services one of the earliest and most-used internet search engines in South Korea, reported a revenue of 3.14 trillion Korean won ($2.32 billion) and an operating profit of 570.6 billion won ($422.67 million) in the third quarter.

Dunamu reported a 35% quarter-over-quarter revenue growth, reporting 385.9 billion won ($262.87 million) in the third quarter, while its net profit rose 145% during the same period, reaching 239 billion won ($162.80 million).