South Korea’s payment giant NHN KCP has initiated a large-scale stablecoin payment pilot using a private Avalanche Layer 1 network. The test, which began on May 21, covers both online and offline transactions and ranks among the biggest stablecoin payment experiments in the region. NHN KCP processed ₩51.5 trillion (approximately $38 billion) in transaction volume last year.
Co-developed with Ava Labs, the dedicated Avalanche Layer 1 is built specifically for payments infrastructure. Around 700 employees at NHN KCP’s headquarters are currently using stablecoins for daily purchases at the company café and cafeteria, scanning QR codes and completing settlements in under two seconds. The pilot also links to PAYCO, one of Korea’s most popular payment apps, allowing users to buy and redeem gift certificates with stablecoins.
A real-time transaction and settlement dashboard lets non-technical merchants monitor blockchain-based payments without touching the underlying system. Smart contracts automate settlements between merchants and the processor. NHN KCP’s representative told local press that the company will develop a full-stack payment solution covering online, offline, and merchant transactions within a unified structure.
The initiative fits a broader Asian pattern: major financial institutions are building on Avalanche infrastructure. Japan’s TIS processes about 50% of the country’s credit card transactions and has launched a Multi-Token Platform on Avalanche; Progmat is moving over $2 billion in tokenized assets to its own Avalanche L1 by June 2026; SMBC explores global stablecoin transfers. Singapore’s StraitsX operates an Avalanche L1 for XSGD and XUSD, integrating with Grab and Alipay+. Thailand’s Orbix Technology runs cross-border QR payments on Avalanche, and South Korea’s KB Kookmin Card builds a hybrid credit card–digital wallet model.
Commercial rollout depends on the Digital Asset Basic Act, currently being drafted. Debate was postponed until after South Korea’s June 3 local elections. The Financial Services Commission plans incremental stablecoin regulation, starting with strict issuance rules. NHN KCP has filed trademarks for KRW- and USD-pegged stablecoins, including USDW. Justin Kim of Ava Labs Asia noted that the Layer 1 mainnet release hinges on regulatory classification for stablecoins and licensed issuers. For now, no commercial launch date is set, but NHN KCP aims to expand the pilot by involving banks, merchants, and other payment providers.
