Frax, IQ Debut First Won-Pegged Stablecoin KRWQ on Coinbase’s Base Network

Highlights:

• IQ and Frax created KRWQ, the first won-backed stablecoin on Coinbase Base.
• KRWQ works on many blockchains using LayerZero and Stargate for easy transfers.
• South Korea is making stablecoin rules to control money and grow the digital economy.

IQ, in partnership with decentralized finance protocol Frax, has introduced KRWQ, a stablecoin pegged to the South Korean won. According to a joint statement, KRWQ becomes the first won-backed stablecoin on Coinbase’s Ethereum Layer 2 network, Base. The first trading pair available is KRWQ/USDC on Aerodrome, a decentralized exchange.

KRWQ is also the first won-pegged token that works on multiple blockchains. It uses LayerZero’s Omnichain Fungible Token standard and the Stargate bridge for easy transfers between chains. Navin Vethanayagam, Chief Brain of IQ, said, “KRWQ meets an important need in the market. “USD-backed stablecoins are common, but no trusted won-backed stablecoin has been launched widely before.”

The Korean Won is now onchain with KRWQ. 🇰🇷

Built by @IQAICOM and @fraxfinance.

Launched on Base with multichain support from @LayerZero_Core and liquidity on @AerodromeFi.

KRWQ is the first tradeable Korean Won stablecoin. https://t.co/cphLaiMJll

— Navin Vethanayagam (@NavV96) October 30, 2025

KRWQ Stablecoin Targets Institutional Market

IQ announced it will apply Frax’s regulatory experience with frxUSD in designing KRWQ to help institutional adoption and due diligence. KRWQ is not available in South Korea yet, as local authorities are still working on basic rules for stablecoins. Only approved partners, including exchanges, market makers, and institutions, can mint or redeem the stablecoin.

KRWQ was launched just one day after South Korean crypto custodian BDACS announced plans for its own won-backed stablecoin, KRW1, on Circle Internet Group’s new blockchain, Arc. Last month, BDACS first issued KRW1 on the Avalanche blockchain after completing a proof-of-concept with Woori Bank.

Every KRW1 is backed 1:1 with won held in escrow at Woori Bank.

With real-time API integration, reserves are verifiable instantly, setting a new benchmark for transparency and trust as Korea prepares its Digital Asset Basic Act.

— Avalanche🔺 (@avax) September 18, 2025

South Korea Advances Stablecoin Rules

South Korea will soon introduce its first law to include stablecoins under the Foreign Exchange Transactions Act. The move aims to prevent money laundering and tax evasion involving digital assets, National Assembly officials said Tuesday. ,

Representative Park Sung-hoon of the main opposition People Power Party plans to submit a bill that treats stablecoins as legal “means of payment.” This would place them in the same category as government-issued currency and banknotes. Park said that stablecoins are getting attention as a way to pay. But they are not yet recognized by the Foreign Exchange Transactions Act because they are different from regular money.

He said:

“This regulatory gap could enable illegal foreign exchange dealings and tax evasion using stablecoins. The bill aims to classify virtual assets pegged to domestic or foreign currencies, which can be used for payments for a broad range of users, as official means of payment under the law.”

The dominance of US dollar-backed stablecoins has pushed South Korea and Japan to consider national digital currencies. FSC Chairman Lee Eog-weon confirmed last week that the stablecoin bill is in its final coordination stage with relevant ministries.

Tether CEO Paolo Ardoino recently told a local news outlet that only a handful of countries, including Korea, are ready to issue national stablecoins on a large scale. He noted that the Korean won could play a major role in payments, tech trades, and international technology deals.