The global market for Korean won (KRW) remains shaped by structural inefficiencies. Much of offshore KRW trading is concentrated in non-deliverable forward (NDF) markets, which are primarily designed for institutional participants. These markets tend to be costly and difficult to access, with multiple layers of intermediation and limited distribution.
As global financial markets continue to move toward faster settlement and continuous trading, these constraints have become more pronounced.
KRWQ was developed by IQ to address this gap. By introducing a Korean won-denominated stablecoin, IQ aims to bring KRW liquidity onchain and improve access to KRW markets within a more transparent and efficient framework. The objective is not to replace USD-based market structure, but to complement it by establishing a credible KRW leg that integrates with global FX liquidity and infrastructure.
Recreating KRW Market Structure Onchain
A key insight in the development of KRWQ was the ability to replicate core elements of the NDF market structure onchain, while improving transparency, access, and capital efficiency.
“The ‘a-ha’ moment was recognizing that KRWQ paired with USDC could replicate and improve the core structure of the NDF market onchain, with better transparency, access, and capital efficiency.” - KRWQ team
As KRWQ progressed from concept to live trading, the focus shifted toward building deep and reliable KRW–USD liquidity. This required a settlement framework that could support both crypto-native activity and institutional participation.
Establishing USDC as the Settlement Layer
To support scalable KRW markets, a widely accepted and trusted USD settlement asset was required. Fragmented USD liquidity can lead to inconsistent pricing, reduced capital efficiency, and increased execution risk, particularly for institutional participants.
USDC was selected as the primary settlement asset for KRWQ due to its established role across both decentralized and centralized market environments.
The KRWQ–USDC pair enables:
- Deeper and more consistent KRW–USD liquidity
- Compatibility with institutional trading standards
- Broader distribution across crypto and traditional market infrastructure
The decision to launch KRWQ on Base further reinforced this approach, given USDC’s existing liquidity and integration within the ecosystem. This allowed IQ to prioritize liquidity formation and product development rather than building a new USD settlement layer.
As KRWQ expanded into institutional products, including derivatives, the importance of settlement asset quality became increasingly evident.
“By pairing KRWQ with USDC, we’ve created a more transparent, lower-cost alternative that institutions can actually use at scale.”
Navin Vethanayagam
Chief Brain of IQ, Co-founder of KRWQ
From Fragmentation to Scalable Market Structure
Prior to establishing USDC as the settlement layer, KRW liquidity onchain was fragmented across multiple venues and assets. This resulted in wider spreads and limited support for institutional workflows.
By anchoring KRWQ markets around USDC, IQ was able to consolidate liquidity and establish a more coherent KRW–USD market structure. This improved price discovery, supported tighter spreads, and enabled more efficient arbitrage.
The enhanced liquidity framework also facilitated the development of new onchain FX products. Notably, KRWQ serves as the foundation for KRW perpetual futures launched in collaboration with EDXM International, with distribution through traditional FX infrastructure and settlement in USDC.
Without a unified settlement asset, scaling KRW–USD markets to this level would have been significantly more challenging.
Results: Improved Cost Efficiency and Market Access
The integration of KRWQ with USDC has led to measurable improvements in trading efficiency, particularly in products designed to replicate and enhance traditional KRW NDF market structure.
KRWQ–USDC perpetual futures launched with EDXM International have demonstrated trading cost reductions of 50% to 75% compared to traditional NDF markets. These improvements are driven by tighter spreads, continuous liquidity, and reduced reliance on intermediaries.
In addition to cost efficiency, the use of USDC as the settlement layer has strengthened KRWQ’s position within institutional market structure. It enables more consistent pricing, improved execution, and broader accessibility for market participants.
USDC’s existing distribution and infrastructure have also accelerated time to market, allowing IQ to focus on liquidity development and product innovation rather than establishing a bespoke settlement standard.
Outlook
Following the successful deployment of KRWQ–USDC markets, IQ expects USDC to remain a central component of its onchain FX strategy. This is particularly relevant as institutional adoption of onchain financial products continues to grow in environments where USDC is already widely used as a settlement standard.
Future growth is expected to be driven by expanded distribution, including deeper engagement with exchanges, market makers, and institutional trading firms, as well as continued product development within the onchain FX ecosystem.
KRWQ represents a step toward a more efficient model for offshore Korean won exposure, offering an alternative to traditional NDF markets with lower costs, improved transparency, and broader market access.
