SS #44 - First Korean Won Stablecoin Hits Base

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Good morning everyone!

The stablecoin spotlight is firmly fixed on Asia once again. Following recent activity in Japan, our attention now turns to South Korea, where a significant new asset has entered the market. IQ and Frax have jointly launched KRWQ, a South Korean won (KRW)-pegged stablecoin. This asset immediately stands out as a fresh challenger in the growing non-USD stablecoin sector and marks the first KRW-pegged stablecoin on Coinbase’s Ethereum Layer 2, Base. Furthermore, KRWQ is built to be a multichain token, utilizing LayerZero's Omnichain Fungible Token (OFT) standard to maximize its accessibility and potential reach across various blockchain ecosystems.

In parallel, the broader stablecoin platform race is accelerating. Amid the successful launches and high demand seen by protocols like Plasma and Stable, Circle has now initiated the public testnet for Arc, its open Layer 1 blockchain. Designed to onboard greater economic activity, Arc's early development boasts participation from over 100 industry heavyweights spanning finance, payments, and technology, including giants like BlackRock, Visa, and AWS.

With a constant stream of vital news reshaping the stablecoin landscape, it’s easy to miss key developments. Stablescope ensures you receive the latest, most crucial stablecoin updates twice a week, delivered directly to your inbox.

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In Today's Edition:

• Headline: First Korean Won Stablecoin Hits Base

• Quick Bites: Circle Launches Arc Public Testnet

• Yield of the Week: 22.04% APY on Exponent

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HEADLINE

First Korean Won Stablecoin Hits Base

State of play: IQ and Frax have launched KRWQ, a South Korean won (KRW)-pegged stablecoin, as a new challenger in the emerging non-USD stablecoin market and a first for Coinbase's Ethereum Layer 2, Base.

• KRWQ, launched by IQ and Frax, is the first KRW-pegged stablecoin on the Base network, designed with Frax's regulatory expertise to target institutional adoption and due diligence.

• KRWQ is positioned as the first won-pegged multichain token, utilizing LayerZero's Omnichain Fungible Token (OFT) standard to enable transfers across multiple blockchains, significantly increasing its potential reach.

• The stablecoin is not currently offered to South Korean residents as local regulations are still being formulated, sparking an ongoing debate between the Bank of Korea (which favors bank-only issuance) and the private sector (which pushes for non-bank issuers).

What’s Next: The KRWQ launch will accelerate South Korea's stablecoin regulation timeline, forcing a decision on whether banks or non-bank entities will control the issuance of won-pegged tokens, while KRWQ builds early liquidity in global DeFi.

Why it Matters: This initiative is crucial as it represents a significant move toward non-USD currency stablecoins, challenging the US dollar's crypto dominance and establishing a potential compliance and multichain blueprint for future national stablecoins in Asia.

Our Take: This strategic move places IQ and Frax at the forefront of the Korean market upon regulatory clarity, but the immediate success hinges entirely on the political outcome of the Bank of Korea's issuance monopoly proposal versus the demand for private sector innovation.

QUICK BITES

• Circle launches Arc public testnet.

• Mizuho says Visa is becoming the ‘stablecoin of stablecoins’.

• Stable to launch Phase 2 of pre-deposit campaign next week.

• Western Union plans stablecoin launch on Solana for early 2026.

• Visa adding support for four stablecoins on four unique blockchains.

• Mastercard eyes Zero Hash acquisition for nearly $2B bet on stablecoins.

• World Liberty Financial to distribute 8.4M WLFI for early USD1 adopters.

• Binance.US denies political motive in listing Trump-linked USD1 stablecoin.

• Tether attests to full physical backing for its gold-based token as market value tops $2B.

• William Blair analysts forecast 'slingshot recovery' for Visa amid stablecoin tailwinds.

• Australia classifies stablecoins, wrapped tokens as financial products in updated guidance.

YIELD OF THE WEEK

Yuzu syzUSD: 14% APY

• Yuzu launches yzUSD, a new overcollateralized stablecoin aiming for a $1 peg, with all collateral verifiably held in eligible on-chain assets.

• Holders can convert yzUSD into syzUSD, a yield-bearing ERC-4626 vault token designed to increase composability and utility within DeFi.

• Direct minting and redemption of yzUSD are restricted to KYC/AML-screened Eligible Investors, while the stablecoin remains available for purchase on secondary markets like DEXs.

Exponent PT-eUSX-11Mar2026: 22.04% APY

• Exponent operates as a yield exchange protocol on Solana, enabling users to trade productive yield assets (like Jito's VRTs or lending positions) for customized fixed-rate or leveraged yield outcomes.

• Users exchange the yield-bearing token eUSX for PT-eUSX (Principal Token), securing a fixed APY; PT-eUSX is purchased below par and redeemed for a full 1 USX worth of eUSX at maturity.

• The protocol's key yield-bearing token is eUSX, which users receive after locking the base stablecoin USX into the Solstice YieldVault.

Dolomite Looped srUSD: 112.05%-322.41% APY

• Dolomite’s method employs a "looping" strategy that uses srUSD as collateral to borrow stablecoins, which are then immediately swapped back into additional srUSD collateral, maintaining a delta-neutral position since both assets are USD-correlated.

• The core interest earned by the strategy is derived solely from the price appreciation of the srUSD collateral token over time.

• Users can enter the strategy by depositing the major stablecoins USD1, USDC, and USDT and select a leverage ratio between 3x and 9x, with additional rewards earned in the form of Reservoir points and oDOLO tokens.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.