BNK Busan Bank and AhnLab Blockchain Company have successfully completed a proof-of-concept trial for a won-pegged stablecoin-based payment and settlement system. The pilot was conducted on the Kaia blockchain, focusing on the development of a programmable digital currency model embedded with spending rules—designed for specific use cases and limited locations.
Five-party alliance completes stablecoin pilot
The pilot formed part of the K STAR alliance, a consortium established to develop infrastructure for a won-based stablecoin. Alongside BNK Busan Bank and AhnLab Blockchain Company, the initiative included OpenAsset, Kaia, and Lambda256 as a node infrastructure provider. Kaia reported the pilot achieved full success for Korean won (KRW) stablecoin infrastructure designed for digital regional currencies. BNK Busan Bank, a leading regional bank, led the project with its extensive experience in finance, particularly in the Busan area.
Unlike previous limited transfer tests, this pilot evaluated the entire lifecycle of the stablecoin: issuance, circulation, balance top-up, payment, and settlement. BNK Busan Bank tested the policy-based currency model by validating top-up, payment, and settlement functionalities. AhnLab covered transaction and settlement processes through wallet design, while OpenAsset oversaw stablecoin issuance and asset alignment. Kaia provided the mainnet infrastructure, and Lambda256 managed node operations and transaction monitoring.
Programmable rules integrated into digital currency
The trial extended beyond standard token transfers—it assessed whether direct restrictions could be embedded in the digital currency’s code. The system verified the operation of programmable digital money models that can be limited by usage area, expiration date, or adapted to different settlement methods based on the place of payment. This structure closely mirrors South Korea’s regional support payments and coupon initiatives, which are used within set boundaries or time frames.
Kaia announced the KRW stablecoin infrastructure for digital regional currencies in South Korea has undergone successful testing.
To assess performance, the partners subjected the system to four different scenarios using BNK Busan Bank’s real operational payment data: normal load, peak load, irregular load, and uninterrupted 24-hour testing. In every case, the success rate was 100%, with each transaction completed in under one second. The pilot also trialed a fee sponsorship model, where users were not directly charged gas fees, and a real-time transaction monitoring system.
AhnLab Blockchain Company CEO Lim Ju-young confirmed the local digital currency solution could operate stably in real-world settings, and said the goal is to expand these efforts to include stablecoins, digital assets, and cross-border settlement services.
Banks move ahead before regulations are finalized
The Busan pilot comes at a time when competition is intensifying among South Korean financial institutions to secure a foothold in stablecoin infrastructure before the regulatory landscape is clarified. In May 2026, KB Financial Group—the holding company of the country’s largest credit institution—along with KG Inicis and OpenAsset, also ran a comparable pilot on the Kaia network.
In that earlier test, payments were made via QR codes at Hollys Coffee outlets, and the won-based stablecoin was even converted into a dollar-pegged stablecoin for cross-border remittances to Vietnam. The transfer was completed in under three minutes, and costs were reportedly around 87% lower than using the SWIFT network.
Mini glossary: Kaia is a Layer 1 blockchain that supports Ethereum-compatible smart contracts. The network was created by merging Kakao’s Klaytn network with LINE’s Finschia network.
Regulatory clarity still pending in Korea
South Korean financial firms are positioning themselves across wallets, settlement lines, and fund transfer channels, even as it remains undecided who will be authorized to issue won-pegged coins. The Digital Asset Basic Act is still pending due to an ongoing jurisdictional dispute between the Bank of Korea and the Financial Services Commission.
BNK Busan Bank and its partners aim to extend the model to use cases including policy funds, digital vouchers, potential central bank digital currency (CBDC) projects, and other won-based stablecoin services. However, the timing of when these products will reach end-users depends on the regulatory calendar set by authorities in Seoul.
