Won stablecoins are arriving before South Korea’s rulebook

BNK Busan Bank, along with AhnLab Blockchain Company, announced that they completed a proof of concept for a won-backed stablecoin payment and settlement system by running the trial on the Kaia blockchain and developing a “policy-type” currency or local currency that would limit where and how to spend the money. This result gives another South Korean lender a working model of digital currency prior to regulations being established.

AhnLab made the pilot announcement for K-STAR, which is an alliance formed for developing an infrastructure for a won-stablecoin. There were five parties involved in the project: BNK Busan Bank, AhnLab Blockchain Company, OpenAsset, Kaia, and node-infrastructure provider Lambda256. Kaia noted that it was a successful pilot of the “KRW stablecoin infrastructure for digital local currencies.”

Compared to the trial being run on only one transfer, this trial was conducted on a complete lifecycle – by testing issuance, circulation, charging, payment and settlement, then validating that it could support itself in a real financial environment. BNK Busan Bank built the model for the policy-type currency, validating charging, payment, and settlement capabilities. AhnLab was responsible for design, user wallets, and transaction/settlement structures; OpenAsset was responsible for issuing stablecoin and verifying asset consistency; Kaia supplied the infrastructure through the mainnet; and Lambda256 managed node operations and tracked transaction flows.

Stablecoins with spending rules

Unlike a standard token transfer, this trial examines the restrictions that may be placed on a digital currency through the actual code of that currency. The company stated that it had proven the existence of programmable digital money with restrictions on its use, as well as expiration dates and different settlement approaches based on where payment was made. This reflects how local governments in South Korea provide both policy funds and vouchers with stipulations, such as where funds may be spent or how long they may be used before expiry.

BREAKING: South Korea’s BNK Busan Bank successfully pilots KRW stablecoin infrastructure for digital local currencies on @KaiaChain. 🇰🇷 pic.twitter.com/1QpBG6BF5l

— Kaia (@KaiaChain) July 6, 2026

For the performance aspect of the pilot, participants input the BNK Busan Bank’s operational payment data and completed tests under four different scenarios – normal load, peak load, irregular load, and continuous testing (24-hour duration) – all of which achieved 100% completion success and all transactions completed within one second. According to reports, the pilot also tested a fee-sponsorship model, wherein users were not required to pay a gas fee directly, as well as real-time transaction monitoring.

“This project is meaningful in that it verified that a digital currency-based local currency service can operate stably even in a real environment,” stated Lim Ju-young, head of AhnLab Blockchain. In addition to that statement, Lim indicated the intent of both parties to extend the work into stablecoins, digital assets, and cross-border settlement.

Korean banks move before the law does

The Busan trial comes at a time of intense competition among South Korean financial groups to be first to market with this innovation, while the legal framework for won stablecoins remains unclear. In May 2026, KB Financial Group, the parent of the country’s largest lender, KB Kookmin Bank, completed a similar Kaia pilot in collaboration with KG Inicis and OpenAsset.

The test utilized QR codes to facilitate payments at Hollys Coffee as well as provide a cross-border remittance to Vietnam by converting the won stablecoin to a dollar stablecoin. This transaction was completed in less than three minutes at a cost that was approximately 87 percent lower than what it would have cost to undertake this transaction using SWIFT (the global network for cross-border money transfers).

Kaia is well-positioned for these projects. It is an EVM-compatible layer-1 chain (a blockchain that runs Ethereum-style smart contracts) created by merging Kakao’s Klaytn and LINE’s Finschia networks.

Banks are intentionally moving faster than regulation does. Financial groups are competing to secure a wallet, settlement rail, and remittance channel before regulations are established about who can issue won-backed coins. The Digital Asset Basic Act of South Korea is still stalled due to a disagreement between the Bank of Korea and the Financial Services Commission over who will be responsible for controlling the issuance of stablecoins.

BNK Busan Bank said the partners will work toward expanding the model into policy funds, digital vouchers, a possible central bank digital currency, and other won-stablecoin services. Whether any of it reaches customers depends on when Seoul finishes its rulebook.