A South Korean blockchain consortium has completed a proof-of-concept (PoC) with BNK Busan Bank to test a blockchain-based payment and settlement system for digital local currencies, another step in the country’s efforts to modernize public payments.
The project was carried out by K-STAR, a digital currency technology alliance that includes AhnLab Blockchain Company, OpenAsset, Kaia, and Lambda256. The test simulated the full payment cycle, from issuing digital local currency and topping up wallets to consumer payments and merchant settlements, within a blockchain-based environment.
@AhnLab_ABC , @Lambda256 , @OpenAsset 등 K-STAR Alliance 파트너들과 함께 진행된 이번 PoC에서는 100% 성공률과 1초 미만의 처리 속도를 달성했습니다.
이번 POC를 통해 아시아 지역 간 결제를 지원하는 네트워크로서의 가능성을 다시 한번 입증했습니다.https://t.co/Fbm8kFOxj0
— Kaia Korea 🇰🇷 (@KaiaChain_KR) July 6, 2026
According to K-STAR, the system successfully processed transactions under multiple operating conditions, including peak traffic and irregular workloads, achieving a 100% transaction success rate while completing payments in under one second.
BNK Busan Bank designed the local currency model, while AhnLab Blockchain Company led the project design and developed the digital wallet and settlement system. OpenAsset managed stablecoin issuance and asset consistency, Kaia supplied the blockchain network, and Lambda256 provided node infrastructure and transaction monitoring.
Digital currency built around spending rules
Unlike conventional digital tokens, the system was designed to include spending conditions directly within the currency itself. The trial demonstrated features such as limiting where funds could be spent, setting expiration dates, and applying different settlement rules based on location.
The consortium said the technology could eventually support government subsidy programs, digital vouchers, central bank digital currency (CBDC) projects, and future Korean won stablecoins.
READ ALSO: South Korea Minister Says Tokenized Stocks Could Be Taxed From 2026
South Korea has been testing blockchain payments for years
South Korea has spent the past few years testing how blockchain can be used for everyday payments instead of limiting the technology to cryptocurrency trading. The Bank of Korea recently completed Project Han River, a pilot that tested tokenized bank deposits and a wholesale central bank digital currency with major commercial banks. The project was designed to see whether blockchain could support faster and more efficient payments within the regulated financial system.
If the technology is adopted more broadly, local currencies could become easier to issue, monitor, and redeem while reducing fraud and administrative costs. For consumers, that could mean receiving government subsidies or local spending vouchers directly into digital wallets with built-in rules, such as where the money can be spent or when it expires. For banks, it creates a way to offer blockchain-based payment services without replacing the existing financial system.
Meanwhile, several major South Korean companies have denied officially joining the Open USD (OUSD) stablecoin alliance after being publicly named as consortium members by Open Standard.
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