KRWQ is a fully fiat backed stablecoin designed to maintain a 1:1 peg with the South Korean Won (KRW). It functions as a programmable, multi-chain digital currency intended for instant settlement and cross-border payments. ^[1] Launched on October 30, 2025 by IQ and Frax Finance, it is the first Korean won-pegged stablecoin on the Base network. ^{[2] [3] [5]}

Overview

KRWQ is a privately issued stablecoin pegged to the South Korean Won, launched in October 2025 through a partnership between IQ and Frax Finance. ^{[2] [3] [5]} It is positioned as a digital version of the currency operating at "internet speed" and was the first Korean won-pegged stablecoin to launch on Coinbase's Ethereum Layer 2 Base network. ^{[2] [4]} The project was created to address the market gap for a credible, large-scale, won-denominated stablecoin for use in global DeFi markets. Navin Vethanayagam, co-founder of IQ, stated, "KRWQ fills a critical gap in the market. While USD-backed stablecoins dominate today, no credible won-denominated stablecoin has ever launched at scale." ^[5] It is explicitly not a Central Bank Digital Currency (CBDC), meaning it is issued by a private entity and does not confer any monetary policy privileges associated with a state-issued currency. The project's primary objective is to offer a transparent and efficient digital representation of the KRW that facilitates rapid, low-cost transactions across multiple blockchain networks. The stablecoin is designed to be fully backed by KRW reserves, with the project claiming to maintain over-collateralization to ensure the stability of its peg. ^[1]

The project emphasizes transparency through publicly accessible reserve information and has announced plans for regular third-party attestations to verify its holdings. KRWQ aims to bridge traditional finance with decentralized finance by enabling use cases such as cross-border remittance, programmable treasury operations for businesses, and global e-commerce settlements. ^[1]

Technology

Core Mechanism

KRWQ operates as a fiat-collateralized stablecoin. The issuer states that each KRWQ token is backed by at least one South Korean Won held in designated reserve accounts. This model is intended to ensure that the value of each token is directly supported by an equivalent amount of fiat currency. The project further claims to maintain a state of over-collateralization, meaning the value of the reserves exceeds the total value of the circulating KRWQ tokens, providing an additional buffer against potential price fluctuations or liquidity issues. ^[1]

Multi-chain Architecture

To enhance accessibility, reduce transaction costs, and improve scalability, the project has adopted a multi-chain strategy, utilizing LayerZero's Omnichain Fungible Token (OFT) standard and the Stargate bridge to allow for transfers across different blockchains. ^{[2] [4] [5]} By deploying on multiple blockchains, KRWQ allows users to transact on the network that best suits their needs regarding speed, cost, and security. ^[1]

The stablecoin is currently live on the following networks:

• Ethereum (Layer 1): 0xc00db6b41473d065027f5ed6fada20fde75f142e
• Base (Layer 2): 0x370923D39f139C64813f173a1bf0b4f9Ba36a24f

The project has also announced plans to expand its presence to other Layer 2 scaling solutions to further improve transaction efficiency. Planned future deployments include:

• Giwa
• Optimism
• Scroll
• Linea

This expansion onto Layer 2 networks is aimed at leveraging their lower gas fees and faster confirmation times compared to the Ethereum mainnet. ^[1]

Developer Ecosystem

KRWQ intends to provide a suite of resources to encourage development and integration within its ecosystem. The project plans to offer Application Programming Interfaces (APIs), comprehensive Software Development Kits (SDKs), and detailed technical documentation to assist developers in building applications that utilize the stablecoin. ^[1]

Tokenomics

Supply and Backing

As of late 2025, the total supply of KRWQ was reported to be 144.51 million tokens. The stablecoin's value is backed by reserves of South Korean Won. The project's official website reported a reserve ratio of 102.4%, indicating that its fiat holdings exceeded the value of the circulating supply. This claim of over 100% asset backing is a core component of its strategy to maintain user trust and the stability of the 1:1 peg with the KRW. ^[1]

Reserve Transparency

To promote transparency and allow for public verification of its reserves, KRWQ provides a public Etherscan address for its primary reserve holdings: 0x5573b8db2403bee020c36ee0df32694dffef04c. In addition to on-chain data, the project has stated its intention to release monthly reserve attestation reports. These reports are planned to be conducted by an independent, third-party firm to provide external validation of the reserve assets. ^[1]

Minting and Redemption

Users can acquire and redeem KRWQ through several methods, which are essential for maintaining the token's peg to the KRW. A dedicated portal on the official website allows for the direct minting of new KRWQ tokens in exchange for KRW and the redemption of KRWQ back into fiat currency. This primary market mechanism helps ensure that the supply of KRWQ can adjust to market demand, keeping its price stable. Additionally, KRWQ is available for trading and swapping on decentralized exchanges, such as Aerodrome Finance, where a KRWQ-USDC pair was launched to provide liquidity. ^{[2] [1] [5]}

Use Cases

The primary applications for KRWQ are focused on improving the efficiency, speed, and accessibility of transactions involving the Korean Won. The project highlights three core use cases:

• Remittance: The stablecoin is designed to facilitate cross-border payments. By leveraging blockchain technology, it enables settlement within minutes, offering a significant improvement over the T+2 (trade date plus two days) settlement times common in traditional international banking systems. ^[1]
• Treasury Operations: Businesses can utilize KRWQ for programmable treasury management. This includes automating vendor payouts, managing payroll, and streamlining internal fund transfers on a single, unified platform. The programmable nature of the stablecoin allows for complex payment flows to be executed automatically based on predefined conditions. ^[1]
• Commerce: KRWQ allows merchants who price their goods and services in KRW to accept payments from a global customer base with near-instantaneous settlement. This reduces the friction and delays associated with traditional payment processing and currency conversion, making it easier for Korean businesses to operate internationally. ^[1]

Compliance and Governance

Regulatory Approach

KRWQ is designed to be the first fully regulatory compliant stablecoin in Korea, developed in anticipation of the forthcoming stablecoin legislation currently under review in the Korean National Assembly. ^{[2] [5]} The initiative builds on the shared commitment of IQ and Frax to advancing transparent, secure, and responsibly governed stablecoin infrastructure worldwide, with IQ bringing Frax's expertise in regulatory compliance to the design of KRWQ. ^[2]

Minting and redemption of KRWQ are limited to eligible KYC’d counterparties, including exchanges, market makers, and integrated institutional partners. At this time, KRWQ is intended for use in global DeFi markets and is not being marketed or offered to Korean residents, as local regulations on stablecoins are still under development. ^{[2] [5]}

Anti-Money Laundering (AML) and Know Your Customer (KYC)

The project has implemented a compliance framework designed to prevent illicit financial activities. This includes a risk-based, tiered Know Your Customer (KYC) system for both individual and institutional users, requiring different levels of verification based on transaction volumes and other risk factors. The framework also involves continuous screening of users against international sanctions lists and databases of Politically Exposed Persons (PEPs). To monitor for suspicious behavior, the system employs transaction risk scoring to automatically identify and escalate anomalous activity for further review. ^[1]

Travel Rule Compliance

KRWQ is designed to adhere to the Financial Action Task Force (FATF) Travel Rule. This rule requires financial institutions and VASPs to collect and transfer originator and beneficiary information for virtual asset transactions above a certain threshold. To meet this requirement, the KRWQ system integrates with specialized third-party service providers that manage the secure exchange of this data between participating entities. ^[1]

Risk Management

The project has outlined a multi-faceted risk management framework to ensure operational stability and protect user assets. This framework addresses several key areas:

• Foreign Exchange (FX) Risk: To manage the risk of volatility between the KRW and other currencies in its reserve holdings, the project employs foreign exchange hedge limits and stress triggers.
• Counterparty Risk: The framework establishes custodial concentration thresholds to mitigate risks associated with holding large portions of its reserves with a single third-party custodian.
• Operational Risk: In the event of technical or operational issues, the project has committed to a policy of public incident reporting, which includes providing timely status updates and detailed post-mortems to maintain transparency with its users. ^[1]