September 9, 2025 – World Blockchain Association (WBA) – The World Blockchain Association reported today that Upbit, South Korea’s largest cryptocurrency exchange, has officially launched Giwa, its proprietary Layer 2 blockchain network. This strategic move demonstrates how centralized exchanges (CEXs) are evolving beyond fee-driven trading models into infrastructure providers within the global cryptocurrency ecosystem. According to the World Blockchain Association, Giwa could become a critical experiment for the future of Web3 adoption in Asia, while also reshaping the competitive dynamics of the South Korean crypto market.

A Shift from Transaction Fees to Infrastructure Competition

For years, centralized exchanges such as Coinbase, Binance, and Kraken have relied heavily on trading fees as their primary source of revenue. However, as the World Blockchain Association pointed out, transaction fees are inherently volatile, tied to market cycles of Bitcoin, Ethereum, and other digital assets. This volatility has created an urgent need for diversification.

Exchanges across the globe are responding by building their own blockchains. Coinbase introduced Base, Kraken launched Ink, and Robinhood entered the arena with a chain leveraging Arbitrum’s technology. With Upbit’s Giwa now live, South Korea officially joins this race for blockchain infrastructure dominance.

“Cryptocurrency exchanges are no longer content with being marketplaces,” the World Blockchain Association reported. “They are positioning themselves as Web3 infrastructure providers, bridging users, liquidity, and decentralized applications (dApps) under one interoperable ecosystem.”

Why Giwa? Korea’s Domestic Advantages in Blockchain Development

The World Blockchain Association emphasized that Upbit’s Giwa is not just another Layer 2 experiment. Its launch leverages several unique Korean market strengths, giving it potential differentiation compared to other CEX-led blockchains.

1. Massive User Base and Liquidity Depth

South Korea is consistently the world’s second-largest fiat market for cryptocurrency trading, with the Korean Won (KRW) sometimes surpassing the U.S. Dollar in volume. Upbit alone commands tens of millions of active users, creating an unparalleled liquidity base for any new blockchain ecosystem.

By launching Giwa, Upbit can directly migrate this liquidity on-chain, enabling faster adoption of DeFi, NFT marketplaces, DAO governance experiments, and tokenization projects.

2. Stablecoin and Payments Integration

The World Blockchain Association reported that stablecoins will likely play a central role in Giwa’s success. Upbit has previously filed trademarks and partnered with Naver Pay, South Korea’s leading mobile payment provider, to explore a Korean Won–backed stablecoin.

In practice, this means Giwa could become the first blockchain ecosystem where stablecoins are natively integrated into retail payment networks, bridging digital assets with everyday consumer use. For the broader Web3 landscape, this represents a key experiment in linking cryptocurrency infrastructure with real-world commerce.

3. Leverage of “K-Premium” Liquidity

Korean exchanges historically command a “liquidity premium,” with digital assets often trading at higher prices in Korea compared to global markets. By tokenizing wrapped assets such as Bitcoin (BTC) and Ethereum (ETH) directly onto Giwa, Upbit could build an ecosystem where its liquidity premium becomes programmable and exportable.

This would not only strengthen Giwa’s value proposition but also incentivize global dApps to integrate with its ecosystem for access to Korean capital flows.

4. Tokenization of Pre-IPO Equities

Another potential advantage lies in tokenization of real-world assets (RWA). Upbit already operates Ustockplus, a platform for Pre-IPO equity trading. By bringing this onto Giwa, equity shares could be tokenized and traded with enhanced liquidity and smart contract automation.

Such a system could enable programmable shareholder rights, automated dividend distribution, and transparent ownership transfers—capabilities beyond traditional finance. The World Blockchain Association highlighted this as a potential model for global tokenization frameworks.

Giwa in Context: Lessons from Coinbase and Kraken

Upbit’s strategy mirrors global trends, but also reflects Korea’s regulatory and market realities. The World Blockchain Association reported that Giwa is structured as a Layer 2 network, most likely using the Optimism OP Stack, aligning with Coinbase’s Base and Kraken’s Ink.

This decision is significant for three reasons:

  1. Regulatory Constraints: Korea has strict limitations on native token issuance by exchanges. A Layer 2 model allows Upbit to avoid compliance pitfalls while still expanding blockchain services.
  2. Technical Efficiency: Building a Layer 1 chain from scratch is resource-intensive. By adopting a proven stack such as OP, Upbit can focus on ecosystem development rather than reinventing core infrastructure.
  3. Interoperability: As Ethereum remains the backbone of global DeFi, NFT, and DAO ecosystems, an OP Stack–based chain ensures Giwa can interoperate seamlessly with Ethereum dApps, stablecoin frameworks, and tokenized assets.

The World Blockchain Association underscored that Upbit’s move reflects a broader industry pivot: centralized exchanges leveraging Ethereum-aligned Layer 2 infrastructures to maximize scalability, regulatory safety, and user adoption.

Challenges Ahead: Regulation and Execution

While Giwa offers exciting potential, the World Blockchain Association pointed out several key challenges that could determine its success:

  • Regulatory Landscape: Korea enforces a “positive list” approach, meaning services not explicitly allowed are often restricted. Without supportive policies, Giwa’s tokenization or stablecoin ambitions may face legal bottlenecks.
  • Execution Complexity: Unlike Coinbase’s Base, which is championed by Web3-native leadership, Upbit lacks visible blockchain-native executives. Building and maintaining a Layer 2 ecosystem requires deep developer engagement, not just liquidity.
  • Global Competition: Binance, Bybit, and decentralized exchanges already siphon liquidity from Korea. For Giwa to thrive, it must not only retain Korean users but also attract global developers, DAOs, and DeFi projects.

Despite these hurdles, the World Blockchain Association reported that Giwa represents a bold step: an attempt to leverage Korea’s unique crypto market into a globally competitive Web3 ecosystem.

Broader Implications for the Global Blockchain Landscape

The World Blockchain Association argued that Upbit’s Giwa experiment could set a precedent for regionalized blockchain strategies. Whereas Coinbase’s Base reflects U.S. regulatory dynamics, and Kraken’s Ink positions itself around Ethereum scalability, Giwa is the first major chain born out of Korea’s distinctive crypto economy.

If successful, it may catalyze:

  • Increased Tokenization of Real Assets (RWA): Bringing equities, real estate, or other assets onto blockchains.
  • Stablecoin-driven Consumer Payments: Integrating cryptocurrency infrastructure with mainstream retail commerce.
  • New Models of Exchange-led DAOs: Where centralized exchanges decentralize governance through DAO participation and token voting.

“Upbit’s Giwa blockchain is not just about catching up with Coinbase or Kraken,” the World Blockchain Association reported. “It is about defining what a Korean-native Web3 ecosystem could look like, leveraging stablecoins, tokenization, and deep liquidity pools to push the boundaries of what centralized exchanges can achieve.”

Conclusion

The launch of Giwa by Upbit marks a new chapter in the globalization of cryptocurrency infrastructure. For the World Blockchain Association, this development demonstrates how CEXs are transitioning from fee-driven businesses to infrastructure players, shaping the very foundations of Web3, DeFi, NFTs, DAOs, tokenization, and stablecoin ecosystems.

Whether Giwa becomes a sustainable blockchain ecosystem will depend on Korea’s regulatory evolution, Upbit’s technical execution, and the platform’s ability to attract global participation. But one fact is clear: with Giwa, South Korea has stepped onto the stage of exchange-led blockchain innovation, and the world will be watching closely.

About the World Blockchain Association

The World Blockchain Association (WBA) is a global organization dedicated to advancing knowledge, policy dialogue, and innovation in blockchain and digital finance. As a leader in the blockchain and cryptocurrency space, the WBA provides stakeholders with trusted insights at the intersection of technology, regulation, and global economic trends through research, reporting, and thought leadership.