Kakao Pay surges as Circle earnings fuel stablecoin rally

Kakao Pay, the payments arm of Kakao Corp., surged on Thursday after the USDC issuer Circle delivered an overnight earnings surprise that rippled through stablecoin-linked shares in Seoul.

The stock climbed as much as 14 percent to 73,300 won ($51.38) in morning trading on the Kospi, before shedding some of the gains to close at 68,300 won.

The rally came as Kakao Pay, viewed as one of the leading players in Korea’s emerging stablecoin sector, tracks Circle’s roughly 35 percent jump in New York overnight.

Circle, which issues the world’s second-largest stablecoin, USDC, reported $770 million in fourth-quarter revenue, a 77 percent increase from the previous quarter and above market expectations. The numbers renewed enthusiasm around digital-dollar infrastructure and the companies seen as positioning themselves to benefit from it.

Kakao Pay has been steadily aligning itself with that future. The company has cast digital assets, particularly stablecoins, as a central growth engine and has moved early as regulators in Seoul debate how to formalize a legal framework. On a recent earnings call, executives said they were preparing stablecoin and security token offering services as rules take shape.

Expectations have been further buoyed by signs the initiative has backing at the group level. CEO Shin Won-keun is reportedly leading a stablecoin-focused task force within Kakao Group, coordinating efforts between Kakao Corp. and the online lender Kakao Bank, and advocating stablecoins as a core new business for the payments unit.

Speaking at a forum for entrepreneurs in Seoul earlier this month, Shin said, “Stablecoins are digital assets optimized for the age of artificial intelligence, so companies will have little choice but to adopt them,” adding that Kakao Pay was also developing potential use cases as it weighs entering the business when the opportunity arises.

Other companies with exposure to the sector also advanced. Kakao’s tech rival Naver rose as much as 5.5 percent on the Kospi. Naver is widely viewed as a likely contender in Korea’s eventual stablecoin market through its partnership with Dunamu, the operator of the country’s largest cryptocurrency exchange. The company last year formalized its expansion into digital assets and is pursuing a merger between Dunamu and its payments arm, Naver Financial.

Also on the benchmark bourse, AI and cloud services firm LG CNS gained more than 5 percent. On the tech-heavy Kosdaq market, payments processor NHN KCP climbed over 10 percent, while fintech security company Aton rose 7 percent.

Sharper were seen among firms with direct ties to Circle. Kosdaq-listed Hecto Financial, which recently became the first Korean company to join the Circle Payments Network, surged nearly 24 percent intraday. Its parent company, Hecto Innovation, also advanced as much as 17 percent.