Is Upbit, Backed by Naver, Evolving into a Crypto Super App?

South Korea’s local media reports that Dunamu, the operator of the Upbit cryptocurrency exchange, and Naver’s subsidiary are to be consolidated into a single business group. A new super app is expected to emerge.

According to the Dong-a Ilbo report, Naver Financial, whose largest shareholder is Naver Group, Korea’s largest portal site, and Dunamu are pursuing a comprehensive stock swap. This will make Dunamu a wholly-owned subsidiary of Naver Financial and incorporate it into the Naver Group.

A Stock Swap to Consolidate Naver, Dunamu

A comprehensive stock swap is a corporate restructuring method in which two companies exchange stock to unify their governance. One becomes the parent holding company, while the other converts to a 100% subsidiary.

Sponsored

Sponsored

This process differs from a traditional merger or acquisition because both companies maintain their original structures, only with a newly-formed parent-subsidiary relationship.

According to the report, Dunamu will soon send its major shareholders a letter outlining these plans. Naver Financial and Dunamu have reportedly established separate task forces to facilitate the comprehensive stock swap.

Following the report, Dunamu said that while discussing various forms of cooperation with Naver Pay beyond stablecoins and unlisted stock trading, it can not confirm any additional cooperation details or methods.

In July, Dunamu and Naver Pay announced a collaboration on a Korean Won-based stablecoin business. In addition, Naver Pay acquired a 70% stake in Dunamu’s unlisted stock platform, Ustockplus, securing management control earlier this month.

A New Super App and Stablecoin Synergy

If it happens, the stock exchange will likely proceed with Naver Financial issuing new shares. These shares will be exchanged for the stakes held by existing Dunamu shareholders. This would convert Dunamu shareholders into Naver Financial shareholders, making Dunamu a wholly-owned subsidiary of Naver Financial.

If the stock swap is over, Naver, Korea’s largest portal company, will own two major financial entities. These include Naver Financial, the country’s largest mobile payment service, and Upbit, the largest cryptocurrency exchange. This would effectively create a “super app” that spans shopping, traditional finance, and crypto trading.

The two companies could also find significant synergy in the ongoing discussions for a Korean Won-based stablecoin. Industry experts believe that if Naver and Upbit were to issue a Won-based stablecoin, they could lead the domestic stablecoin ecosystem. They could leverage Naver Pay’s extensive payment network and Upbit’s cryptocurrency distribution capabilities.

Dunamu revealed its intentions for a stablecoin during the Upbit Developer Conference (UDC) in early September, unveiling its own Web3-based blockchain, GIWA Chain, and GIWA wallet. The GIWA ecosystem includes identity verification and anti-money laundering designs to enhance crypto transparency in preparation for integration with traditional finance.