Table of Contents
The Agreement and Its Immediate Terms
South Korea's Shinhan Financial Group signed a strategic agreement with Visa on August 26, 2026 to test stablecoin and payment services using Visa's stablecoin platform. The partnership will verify issuance, remittance, and redemption processes and jointly design a business model specific to South Korea's regulatory and market environment. This is the first publicly announced agreement between a Korean financial institution and a major payment network to test stablecoin infrastructure at an institutional scale.
Two days later, on August 28, 2026, Dunamu, the operator of the Upbit exchange, announced a separate Visa partnership to explore stablecoin payments, remittances, and OUSD-based models. The timing of the announcements suggests coordinated movement by Visa to establish multiple institutional footholds in the Korean market within a single week.
What the Agreements Specify
The Shinhan-Visa agreement focuses on three specific operational processes: issuance, remittance, and redemption. These are the basic functions required for a stablecoin to operate as a payment instrument within a regulated financial system. The agreement does not specify whether the testing will involve an existing stablecoin or a newly issued asset, nor does it name the blockchain infrastructure that will support the platform. Those details are not disclosed in the public announcement.
The Dunamu partnership mentions "OUSD-based models," which suggests Dunamu may be evaluating stablecoins that can be denominated or redeemed in offshore U.S. dollars. This is a significant detail because it implies cross-border use cases beyond domestic Korean won settlement. The distinction matters for regulatory treatment and for the range of remittance corridors the platform could serve.
The Regulatory Context in South Korea
South Korea's Virtual Asset User Protection Act took effect in July 2023 and established disclosure requirements, reserve audits, and separation of customer funds from exchange operating capital. The law does not yet provide comprehensive guidance on stablecoin issuance by domestic financial institutions, which means Shinhan and Dunamu are entering a testing phase in a jurisdiction where the legal framework for stablecoin issuance by banks is still being developed.
The partnerships signal that both entities expect South Korea to adopt clearer stablecoin rules within a timeframe that makes this testing worthwhile. If they did not, the investments in infrastructure and legal coordination with Visa would be premature. This is revealed preference: institutional actors are positioning for a regime that does not yet exist but that they expect to be defined soon.
Visa's Payment Network Positioning
Visa has been building stablecoin settlement infrastructure since at least 2021, when it began pilot programs for USDC settlement on Ethereum. The Korean agreements mark a shift from pilot programs to strategic partnerships with domestic financial institutions in a major market. Visa is not issuing stablecoins itself but is providing the platform infrastructure that allows financial institutions to issue, settle, and redeem stablecoins within Visa's existing network.
This positioning allows Visa to remain a payment network operator without taking on the regulatory obligations of a stablecoin issuer. The financial institutions that use the platform become the issuers and assume the compliance obligations under their respective jurisdictions. Visa's role is to provide the rails, not the asset. That distinction has regulatory significance, because it keeps Visa in the position it has historically occupied in traditional card networks.
The Dunamu Angle and Exchange-Issued Stablecoins
Dunamu operates Upbit, the largest cryptocurrency exchange in South Korea by trading volume. A stablecoin partnership between an exchange operator and a payment network is structurally different from a partnership between a traditional bank and a payment network. Exchanges already have large user bases with existing cryptocurrency deposits, which gives them distribution advantages that banks do not have for stablecoin adoption.
However, exchanges are subject to more restrictive rules on commingling of assets and on reserve transparency under the Virtual Asset User Protection Act. If Dunamu moves forward with stablecoin issuance, it will need to demonstrate that reserves are held separately and are audited regularly, and that redemption processes meet the regulatory standards for customer protection. The partnership with Visa suggests Dunamu is positioning to meet those standards using infrastructure provided by an entity with established regulatory relationships in multiple jurisdictions.
The reference to OUSD-based models suggests that Dunamu may be considering stablecoins that are not pegged to the Korean won but are instead pegged to the U.S. dollar and issued offshore. This would allow Dunamu to operate stablecoin services that serve cross-border remittance use cases without waiting for South Korea to finalize domestic stablecoin issuance rules. Whether this structure will satisfy Korean regulators depends on how they interpret the extraterritorial scope of the Virtual Asset User Protection Act, which is not yet settled.
The U.S. Regulatory Context and SEC Custody Rule Review
On the same week these partnerships were announced, a proposal from the U.S. Securities and Exchange Commission to update crypto custody rules for investment advisers was sent to the White House for regulatory review. The SEC stated that the rulemaking is intended to clarify how advisers and investment companies can hold digital assets for clients while modernizing outdated custody provisions. This represents part of a broader shift toward more explicit federal rules for digital assets, which has been underway since the collapse of FTX in November 2022.
The timing is relevant because it suggests that both U.S. and Asian regulators are working on parallel tracks to clarify institutional custody and issuance rules for digital assets. If the SEC custody rule is finalized and provides a workable framework for investment advisers to hold stablecoins on behalf of clients, it would create regulatory alignment between the U.S. and jurisdictions like South Korea that are also developing stablecoin frameworks. That alignment would make cross-border stablecoin settlement more feasible, which is precisely what Visa's platform is designed to facilitate.
The SEC rule does not directly address stablecoin issuance, but it does address custody of digital assets by entities that are subject to Investment Advisers Act registration. If stablecoins are classified as securities under U.S. law, the custody rule would apply to any investment adviser holding them for clients. The rule is not yet final, and the classification of stablecoins under U.S. securities law remains contested, but the fact that the SEC is modernizing its custody framework indicates that it expects stablecoins to be part of institutional portfolios in the near term.
What the Agreements Do Not Address
The public announcements do not specify the blockchain infrastructure that will support the Visa stablecoin platform in South Korea. Whether Visa will use Ethereum, Solana, or a private permissioned chain is not disclosed. That choice has implications for interoperability, transaction costs, and regulatory compliance, and it will determine whether stablecoins issued under this partnership can interact with decentralized finance protocols or will be confined to closed-loop systems.
The agreements also do not specify whether the stablecoins tested under the Shinhan and Dunamu partnerships will be redeemable on exchanges beyond Upbit or will be limited to Visa's payment network. If the stablecoins are only redeemable within Visa's network, they function more like closed-loop payment tokens than open stablecoins. If they are redeemable on multiple exchanges, they take on characteristics of widely circulating digital assets, which would trigger different regulatory treatment under both U.S. and Korean law.
Finally, the agreements do not address how reserves will be audited or who will serve as the custodian for the fiat currency backing the stablecoins. Reserve transparency has been the central regulatory issue for stablecoin issuers since the Tether controversies of 2018 and 2019. Without disclosure of the reserve structure and the audit process, it is not possible to assess whether the stablecoins issued under these partnerships will meet the standards that regulators in the U.S., the EU under MiCA, or South Korea are likely to require.
The Takeaway
These partnerships represent institutional positioning ahead of regulatory clarity, not confirmation that the rules are settled. Visa is building the infrastructure, and Shinhan and Dunamu are testing the operational processes, in anticipation of a regulatory regime that will allow banks and exchanges to issue stablecoins within defined compliance frameworks. The fact that two separate entities signed agreements with Visa within two days suggests that Visa has been negotiating these partnerships for months and timed the announcements to signal momentum in the Korean market.
The parallel SEC custody rule review in the U.S. indicates that regulators are moving toward frameworks that will allow institutional participation in stablecoin markets, but those frameworks are not yet final. Until the SEC custody rule is published in final form, and until South Korea provides clearer guidance on stablecoin issuance by domestic financial institutions, these partnerships remain preparatory. They are significant because they reveal where institutions expect the regulatory environment to go, but they do not yet confirm that it has arrived.
Frequently Asked Questions
What is the Shinhan-Visa stablecoin agreement about?
Shinhan Financial Group and Visa signed an agreement on August 26, 2026 to test stablecoin issuance, remittance, and redemption processes using Visa's stablecoin platform. The partnership will design a business model specific to South Korea's regulatory environment. This is the first publicly announced institutional stablecoin partnership between a Korean bank and a major payment network.
What did Dunamu and Visa announce?
On August 28, 2026, Dunamu, which operates the Upbit exchange, announced a partnership with Visa to explore stablecoin payments, remittances, and OUSD-based models. The agreement was announced two days after the Shinhan-Visa deal and suggests Visa is establishing multiple institutional partnerships in South Korea within the same week.
How does South Korea regulate stablecoins currently?
South Korea's Virtual Asset User Protection Act, which took effect in July 2023, requires exchanges to disclose reserves, conduct audits, and separate customer funds from operating capital. However, the law does not yet provide comprehensive guidance on stablecoin issuance by domestic financial institutions. The Shinhan and Dunamu partnerships suggest both entities expect clearer stablecoin rules to be adopted soon.
What is Visa's role in these stablecoin partnerships?
Visa is providing the platform infrastructure that allows financial institutions to issue, settle, and redeem stablecoins within Visa's network. Visa does not issue stablecoins itself and remains a payment network operator, which allows it to avoid the regulatory obligations of a stablecoin issuer. The financial institutions using the platform assume the compliance obligations under their respective jurisdictions.
What does the SEC custody rule review mean for stablecoins?
The SEC sent a proposal to update crypto custody rules for investment advisers to the White House for regulatory review in late August 2026. The rule is intended to clarify how advisers and investment companies can hold digital assets for clients. If finalized, it would provide a framework for institutional custody of stablecoins in the U.S. and create regulatory alignment with jurisdictions like South Korea that are developing similar frameworks.
