Naver, Dunamu Merger to Support Stablecoin Rollout in Busan City

TLDR

• Naver Financial completed wallet for Busan stablecoin with launch expected next month.

• Dunamu and Naver to merge via stock-swap deal worth $13.8 billion.

• GIWA, Dunamu’s Ethereum L2 for stablecoins, ties into merger strategy.

• Merger may lead to Nasdaq IPO and major regional stablecoin expansion.

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Naver Financial is finalizing a digital wallet service for a local stablecoin project in Busan, South Korea’s second-largest city. The fintech arm of Naver has collaborated with Hashed and the Busan Digital Asset Exchange (BDAN) to build a solution enabling tourists and residents to use the city’s regional currency, “Dongbaek-jeon,” as a stablecoin.

Seoul Economic Daily reported the project is in its final testing phase and set to launch in December. The wallet will allow users to exchange fiat currencies into the stablecoin-backed Dongbaek-jeon. Busan’s local government launched the original currency program to support small businesses and boost local spending, operating today as a card-based system with cashback incentives.

BNK Busan Bank, which currently issues Dongbaek-jeon, is exploring stablecoin implementation as part of this upgrade. The currency’s user base reportedly exceeds 1.5 million people monthly. Naver Financial also intends to integrate this service into its existing crypto wallet, Naver Pay Wallet, though regulatory approval is still pending for full functionality.

Merger With Dunamu to Reshape South Korea’s Digital Finance

While preparing the stablecoin wallet, Naver Financial is simultaneously working on a major corporate merger. According to Maeil Business Newspaper, Naver Financial and Dunamu—operator of South Korea’s largest crypto exchange, Upbit—are expected to approve a stock-swap merger through separate board meetings.

The stock swap is expected to value the deal at 20 trillion Korean won ($13.8 billion). Reports suggest that Dunamu shareholders will receive Naver Financial shares at a 1:3.3–3.4 ratio. Following the transaction, Dunamu will become a wholly-owned subsidiary of Naver Financial.

Dunamu Chairman Song Chi-hyung and Vice Chairman Kim Hyung-nyeon will reportedly become the largest shareholders in the merged firm with a combined stake close to 30%. Naver’s shareholding will reduce from 69% to 17%, although Dunamu is expected to delegate voting rights back to Naver to avoid regulatory challenges regarding monopolies.

Stablecoin Strategy and Layer-2 Blockchain GIWA

The merger aligns with both firms’ ambitions to expand into stablecoins and blockchain-based financial infrastructure. According to Presto Research, this joint move supports a long-standing goal of making stablecoins a bridge between payments and crypto services.

Dunamu has already announced the development of GIWA, a custom Ethereum Layer-2 blockchain built specifically to support stablecoins and payments. The GIWA chain is reportedly designed to reduce transaction costs and improve scalability for retail and institutional users alike.

In July, local reports revealed plans for a won-backed stablecoin led by Naver Pay. Executives are expected to explain how Naver Pay will be integrated into Dunamu’s blockchain framework during an upcoming press briefing. Analysts suggest this joint effort could help the merged firm pursue a public offering on Nasdaq with a future valuation north of $34.5 billion.

Regulatory Outlook and Compliance Challenges

Although the merger and stablecoin plans are advancing, regulatory hurdles remain. The South Korean Financial Services Commission and the Fair Trade Commission must approve the merger, evaluating concerns related to competition, market dominance, and compliance.

Analysts believe regulators may allow the deal while opening up the stablecoin sector to additional fintech competitors. South Korea already has four licensed crypto exchanges that could compete in this space. However, recent enforcement actions may complicate matters. Dunamu was fined approximately $24.3 million for violations involving customer identification in over five million cases. More penalties across the sector may follow.

Despite these challenges, the joint wallet and merger initiative mark a major development in the country’s digital asset landscape. As the South Korean government prepares stablecoin regulations, local tech conglomerates are accelerating their moves to become central players in the evolving digital economy.

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