South Korea has launched its first government-backed blockchain stablecoin pilot after Gyeonggi Province confirmed an eight-month proof-of-concept program scheduled to begin in August.
Summary
- Gyeonggi Province will begin South Korea’s first government-backed blockchain stablecoin pilot in August.
- ZKrypto will test issuance, settlement, privacy, fraud prevention, and proof-of-reserves through February 2027.
- Toss and KT have also launched separate initiatives to develop infrastructure for won-based stablecoins.
According to blockchain media outlet NexBlock, Gyeonggi Province, the country’s most populous province, will begin testing a blockchain-based stablecoin in August as part of an initiative to examine its use for regional currency and government disbursements. The project is being led by blockchain security company ZKrypto and is expected to run until February 2027.
First phase focuses on core stablecoin functions
During the initial stage, the pilot will test how the stablecoin is issued, circulated, and settled before moving into a second phase between October and December. ZKrypto said the later stage will examine fraud prevention measures, privacy protections, and the possibility of using the stablecoin across public benefit programs.
To support the pilot, ZKrypto said the system will use zero-knowledge proof technology to stop duplicate spending while protecting user privacy. The company added that proof-of-reserves technology will verify reserve assets in real time throughout the testing process.
ZKrypto also stated that the project comes as dollar-denominated stablecoins continue gaining adoption globally, adding that South Korea should strengthen its own domestic stablecoin infrastructure. The company presented the provincial pilot as one step toward evaluating whether locally issued digital assets can support public-sector financial services.
Private companies are expanding won stablecoin infrastructure
The government-backed pilot follows several private-sector initiatives announced this week as South Korean companies continue testing blockchain payment infrastructure.
Earlier this week, financial super-app Toss signed a strategic agreement with Optimism and Sunnyside Labs to evaluate infrastructure for South Korean won-linked stablecoins.
According to a press release shared with crypto.news, the three companies will conduct a three-month proof-of-concept to determine whether blockchain infrastructure can support institutional payment systems while complying with South Korean financial regulations.
Separately, South Korea’s largest telecommunications company, KT, disclosed plans to invest 18 trillion won ($13.2 billion) over the next three years, including 6 trillion won for artificial intelligence infrastructure and 12 trillion won for networks, information technology, and cybersecurity.
According to South Korean technology publication Digital Daily, KT Chief Executive Park Yoon-young said the investment strategy also includes expanding into tokenization services and infrastructure for won-based stablecoins.
The company said those blockchain initiatives will be developed alongside upgrades to its core telecommunications business as part of its long-term growth plans.
Taken together, the announcements show government agencies, financial technology companies, and telecommunications providers testing different parts of South Korea’s digital payments infrastructure.
While Gyeonggi Province is examining stablecoin use in public administration, private companies are evaluating blockchain networks for regulated payments and building the systems needed to support future won-denominated digital assets.
