BNK Busan Bank, South Korea’s major regional lender, and K-STAR have completed a proof-of-concept (PoC) for a blockchain-based digital local currency payment and settlement system, testing how programmable won-based money could operate in a real financial environment.
AhnLab Blockchain Company, which is part of K-STAR, said the won stablecoin technology alliance carried out the project with BNK Busan Bank to test whether blockchain can support a full digital local currency cycle, from issuance and circulation to payments and settlement.
Pilot verifies 4-stage local currency flow
The project tested a digital local currency model with rules such as expiry and merchant-use restrictions built into the money itself. AhnLab said the trial examined whether the system could handle the full local currency process in a real financial setting, from issuance and circulation to payments and settlement.
BNK Busan Bank built the won-backed digital local currency model around existing local currency operations, then tested core functions such as top-ups, payments and settlement.
AhnLab Blockchain Company led the overall project design and developed the user wallet, transaction flow and settlement structure, while OpenAsset managed stablecoin issuance and asset consistency, Kaia provided the mainnet environment, and Lambda256 supported node infrastructure operations and transaction-flow monitoring.
AhnLab said the cooperation confirmed the feasibility of linking issuance, infrastructure, settlement and security into a digital local currency operating system.
PoC tests expiry, merchant limits and settlement rules
The company said the pilot showed the system could go beyond simple token transfers by applying built-in rules on the Kaia mainnet, including approved-merchant limits, automatic expiry and different settlement terms depending on the use case.
AhnLab said the results point to possible future applications in policy funds, digital vouchers, central bank digital currencies and won stablecoin-based services.
The test also offered a working model for how local currencies could move from traditional payment structures into digital systems with policy controls embedded directly into the money layer.
Tests hit 100% success and sub-1-second processing
The Kaia mainnet performance test used payment operation data from BNK Busan Bank to build load scenarios, including normal, congested, maximum-load and irregular mixed conditions, as well as a 24-hour continuous test. AhnLab said the system recorded a 100% transaction success rate and processing performance of under one second across all sections.
Im Ju-yeong, head of AhnLab Blockchain Company, said the project showed that digital currency-based local currency services can operate stably in real conditions, adding that the participants plan to expand the model into stablecoins, digital assets and cross-border payment and settlement.
