Viva Republica, the operator of South Korea-based mobile money transfer app Toss, reportedly signed a memorandum of understanding with blockchain company Optimism to test a Korean won-based stablecoin infrastructure for institutional payments.
The companies, along with privacy solutions provider Sunnyside Labs, will conduct a three-month proof of concept (PoC) using Optimism’s OP Stack and Sunnyside’s Privacy Boost protocol to develop a Korean won-based stablecoin and assess whether these technologies can be applied to domestic blockchain-based payment infrastructure for financial institutions, reported Yonhap News on Wednesday.
The PoC will explore whether financial institutions can control the settlement process, the feasibility of implementing know-your-customer (KYC) and anti-money laundering (AML) verification requirements and whether transactions can remain private on a public blockchain ledger.
Toss plans to use the three-month PoC as the foundation for building compliant stablecoin-based payment infrastructure in the country, according to the report.
Cointelegraph has approached Toss for more details about the stablecoin pilot.
Toss app homepage. Source: Toss.im
Optimism will provide the blockchain infrastructure, while Sunnyside Labs will provide the privacy-preserving technology to shield transfers. Sunnyside is a core developer for the Optimism Collective and has been building core OP Stack infrastructure.
Seoul-headquartered Toss was launched in 2015 and claims it has more than 30 million users on its mobile application.
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Payments giants test stablecoins for improved settlement
Toss’ PoC follows similar stablecoin-based initiatives from other large financial institutions in the country.
In late April, one of South Korea’s largest credit card providers, Shinhan Card, teamed with the Solana Foundation to test the commercial feasibility of stablecoin payments and the use of non-custodial wallets, after completing a joint pilot project earlier that month.
Shinhan Card said it hoped to eventually develop its own DeFi-linked services that implement blockchain oracles, a technology used to connect information in offchain and onchain environments.
Late last year, payments giant Visa also launched USD Coin (USDC) settlement services for some US-based financial institutions on the Solana blockchain in one of the more advanced examples of stablecoin projects.
Other large payment providers exploring stablecoins for improved payments and settlement include Mastercard and South Korea’s BC Card.
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