South Korean payments heavyweight NHN KCP has signed a memorandum of understanding (MOU) with Ava Labs, the developer behind Avalanche, to jointly build a Layer 1 blockchain mainnet tailored for real-world payment scenarios. The infrastructure will be deployed via Ava Cloud, a service that lets enterprises spin up and manage their own L1 networks.
NHN KCP's operations span payment gateway (PG) services, VAN services, and smart services, holding a dominant share in South Korea's online shopping mall transactions and online VAN market.
Three Technical Pillars: Sub-Second Authorization, On-Chain Encryption, Customizable Merchant Ecosystem
According to the joint announcement, the collaboration focuses on three core areas:
1. Ultra-fast payment authorization targeting sub-second processing speed;
2. On-chain encryption of transaction data to enhance security;
3. A customizable merchant ecosystem offering flexible infrastructure for diverse payment applications.
NHN KCP CEO Jun-seok Park stated: "This agreement is significant, combining NHN KCP's industry-leading payment expertise with world-class blockchain technology to create an innovative model applicable to real commerce."
Launch Timeline Uncertain: South Korean Regulation Is Key Variable
The two parties plan to first conduct a proof-of-concept (PoC) to validate technical feasibility and expand connections with global financial and payment institutions.
However, when asked by TheBlock about the specific launch timeline for the L1, Ava Labs Asia Head Justin Kim responded that it "depends heavily on the passage of pending crypto regulatory legislation in South Korea" — namely the Digital Asset Basic Act, which includes a stablecoin regulatory framework.
This means that even if the technology is ready, regulatory uncertainty remains the biggest variable for the entire project.
Avalanche's Deep Push into South Korea: From KB Kookmin Card to NHN
Avalanche has accelerated its penetration into South Korea's financial sector. Last month, KB Kookmin Card, one of the country's largest credit card issuers, announced a partnership with Avalanche and OpenAsset to build a hybrid stablecoin payment system linking stablecoin wallets to existing credit cards, enabling consumers to use both stablecoins and credit lines.
Moreover, NHN Cloud (another NHN Group subsidiary) had already partnered with Avalanche to offer financial-grade cloud node services. NHN KCP's addition now extends the collaboration from cloud infrastructure to the payment application layer.
Beyond the L1 mainnet, NHN and Ava Labs also said they will explore new digital commerce opportunities, including tokenized deposit models, multi-stablecoin settlement frameworks, and cross-border payments.