KRWT is a privately issued stablecoin designed to maintain a 1:1 peg with the South Korean Won (KRW). KRWT was created in a partnership between IQ, a leading AI and DeFi protocol with a major presence in South Korea and the stablecoin and DeFi protocol Frax. It aims to provide a programmable and transparent digital version of the Won for use on public blockchains. ^{[3] [4]}

Overview

KRWT is a compliant, on-chain stablecoin pegged to the South Korean Won. The project's core objective is to facilitate instant settlement for various financial activities, including remittance, treasury operations, and commerce, by leveraging blockchain technology. It positions itself as a compliance-focused digital asset, with its operational model drawing parallels to stablecoins backed by tokenized real-world assets (RWAs). It will utilize a similar compliance framework to that of Securitize's BUIDL fund, which is utilized by Frax for its frxUSD stablecoin, suggesting a mechanism potentially backed by assets like short-term government securities. ^[3]

The project emphasizes transparency through a publicly accessible "Transparency Hub" that provides real-time data on its circulating supply and the value of its reserves. It also commits to regular, independent third-party attestations to verify its backing. KRWT operates with a stated reserve ratio of over 100% to ensure that every token in circulation is fully collateralized. KRWT is a privately issued stablecoin and not a Central Bank Digital Currency (CBDC). ^[4]

History

The launch of KRWT was announced in September, 2025 as a collaboration between IQ and Frax. The announcement positioned KRWT as the first stablecoin pegged to the South Korean Won operating on public blockchains. While the public announcement occurred in September, operational activities preceded this date. ^{[3] [4]}

Technology and Mechanism

Peg Stability and Reserves

KRWT is designed to maintain its value at a 1:1 ratio with the South Korean Won. This peg is maintained by holding reserves that are intended to fully back the value of all circulating KRWT tokens. To manage potential market volatility and currency fluctuations, the project employs an "FX hedge methodology" as part of its risk management framework. ^[4]

The announcement of KRWT's launch suggested its backing mechanism is similar to the model used by Frax for its frxUSD stablecoin, which leverages tokenized real-world assets (RWAs) such as those available through Securitize's BUIDL fund. This implies that KRWT's reserves may consist of highly liquid, low-risk assets like short-term government securities, held in a tokenized format to ensure both stability and compliance. ^[3]

Transparency

A central feature of KRWT is its commitment to transparency, facilitated through a dedicated "Transparency Hub" on its official website. This hub provides several key features to allow public verification of its reserves and supply:

• Real-Time Data: The platform displays live data on the total circulating supply of KRWT and the corresponding value of its reserves, with updates occurring approximately every 10 seconds.
• Transaction Logs: All mint and burn transactions are published, providing a public ledger of changes to the token supply.
• Independent Attestations: The project will undergo monthly reserve attestations conducted by an independent third-party firm to verify that the assets held in reserve are sufficient to back all tokens in circulation. ^[4]

Blockchain Networks

KRWT was initially launched on Base, a Layer 2 scaling solution for Ethereum. The project has announced plans for future expansion to several other blockchain networks to increase its accessibility and utility across the decentralized finance (DeFi) ecosystem. The planned network expansions include:

• Ethereum (L1)
• Giwa (L2)
• Optimism (L2)
• Fraxtal
• Scroll (L2)
• Linea (L2)

The project also plans to release simple APIs and comprehensive SDKs to assist developers in integrating KRWT into their applications, though as of September 2025, the documentation and GitHub repositories were not yet public. ^[4]

Tokenomics

As a stablecoin, KRWT's tokenomics are centered on maintaining its peg to the South Korean Won. The supply of KRWT is dynamic and is managed through a mint-and-burn mechanism tied to the deposit and redemption of fiat KRW. When a user deposits KRW into the reserve, a corresponding amount of KRWT is minted. Conversely, when a user redeems KRWT for KRW, the tokens are burned, removing them from circulation. ^[4]

Use Cases

KRWT is designed to serve several functions within both traditional finance and the digital asset economy. The primary use cases identified by the project include:

• Remittance: Enabling cross-border payments that can settle in minutes rather than the days required by traditional banking systems (T+2 settlement).
• Treasury Operations: Allowing businesses to manage corporate funds on-chain, program automated vendor payouts, and handle internal transfers on a single, efficient rail.
• Commerce: Facilitating global settlement for merchants who price their goods and services in KRW, enabling them to accept payments from anywhere in the world with near-instantaneous finality. ^[4]

Partnerships and Integrations

KRWT was established through a foundational partnership and has since integrated with various entities across the banking and digital asset sectors.

Founding Partners

The project was launched as a collaborative effort between two primary entities:

• IQ: A technology company involved in the creation and launch of the stablecoin.
• Frax: A prominent decentralized finance protocol known for its stablecoin products, including frxUSD. ^[3]

Banking and Fiat Ramps

To facilitate the movement of funds between the traditional financial system and the blockchain, KRWT is integrating direct on-ramp and off-ramps with major South Korean banks, including:

• KB Bank
• Shinhan Bank ^[4]

Ecosystem Support

KRWT is integrating a range of wallets, exchanges, and DeFi protocols, enhancing its usability and liquidity including companies such as MetaMask, Rabby, OKX, Upbit, Uniswap and Curve. ^[4]

Regulatory Approach

The project's strategy includes pursuing necessary licenses and maintaining communication with regulatory bodies. It is actively seeking Virtual Asset Service Provider (VASP) registrations where required and partners with licensed Money Services Business (MSB) and Electronic Money Institution (EMI) entities to handle fiat settlement. The project also states that it maintains an "ongoing dialogue with KR regulators" to ensure its operations align with local financial regulations. ^[4]

AML and KYC Controls

To prevent illicit financial activities, KRWT is implementing a robust Anti-Money Laundering (AML) and Know Your Customer (KYC) program. This includes:

• A risk-based, tiered KYC process for both individual and institutional users.
• Continuous screening of users against international sanctions lists and for identification as Politically Exposed Persons (PEPs).
• Transaction risk scoring and monitoring to detect and escalate anomalous activity patterns. ^[4]

Travel Rule Alignment

KRWT is designed to comply with the Financial Action Task Force (FATF) "Travel Rule," which requires VASPs to share originator and beneficiary information for transactions above a certain threshold. The project integrates with Travel Rule service providers to ensure this data is packaged and exchanged with counterparty institutions in a compliant manner. ^[4]

Risk Management

The project has established a formal risk management framework to address potential threats to its stability and operations. This framework covers three main areas:

• Market Risk: Management of foreign exchange (FX) hedge limits and stress triggers to protect the peg.
• Counterparty Risk: Establishment of custodial concentration thresholds to mitigate risks associated with third-party custodians.
• Operational Risk: A commitment to public incident reporting, including status updates and post-mortems, to maintain transparency with users. ^[4]