South Korean payment processor NHN KCP has started testing stablecoin payments on a blockchain network built with Avalanche infrastructure. The pilot is being run with Payco, a mobile payments platform that competes with Naver Pay and Kakao Pay, and is aimed at bringing blockchain-based payments into routine commerce. In internal trials involving nearly 700 employees, transaction approvals were recorded at about two seconds after a QR code scan.
Payco pilot mirrors existing mobile payment flows
The proof-of-concept was designed to make stablecoin payments feel similar to standard mobile payment services. Users were able to buy and sell Payco gift certificates directly inside the app using stablecoins, without going through complicated wallet steps or separate settlement processes. The pilot also covered online purchases and blockchain-based settlement for offline retail payments.
NHN KCP added a merchant administration dashboard tailored for stablecoin settlement. Through that interface, merchants can track transaction records and settlement data in real time without needing blockchain expertise. The structure of the test shows a focus on day-to-day merchant operations, not just transaction speed.
Ava Labs agreement expands into a payment-focused Layer 1
The initiative follows a memorandum of understanding signed last month between NHN KCP and Ava Labs. Under that agreement, the two companies said they would build a payment-focused layer 1 blockchain network powered by Avalanche technology. The network is intended to support near-real-time payment approvals and merchant settlements across digital commerce services.
The infrastructure is also expected to integrate on-chain encryption technology to protect transaction details and settlement information. NHN KCP already processes payments for a significant share of South Korean e-commerce businesses. If the pilot performs well, that reach could help stablecoin payments move into mainstream retail systems in the country.
Cash usage keeps shrinking in South Korea
The test comes as South Korea continues to expand its digital payments ecosystem. The report cited Statista data showing that cash accounted for about 16% of payments in 2024. NHN KCP said it plans to refine the platform using data gathered during the test phase and share the results with financial institutions and large merchants interested in blockchain payment infrastructure.