South Korea Seeks to Compete with USD Stablecoins Through Blockchain-Based VAT Reimbursements
- NH NongHyup Bank tests VAT refund system using stablecoin tech with Avalanche , Fireblocks, Mastercard , and Worldpay. - Aims to challenge USD stablecoin dominance by streamlining cross-border refunds via blockchain automation. - South Korea’s FSC plans KRW-pegged stablecoin rules by year-end, restricting non-bank issuers. - Domestic stablecoin transactions exceed $41B, as major banks collaborate on won-backed infrastructure. - Pilot could redefine cross-border payments with faster processing and reduced
NH NongHyup Bank, ranking among South Korea’s top five banks, has initiated a proof-of-concept (PoC) project to digitalize value-added tax (VAT) refunds for foreign visitors by utilizing stablecoin technology. This pilot, developed in partnership with
The PoC utilizes Avalanche’s blockchain to
If successful, the pilot could transform cross-border transactions by enabling quicker processing, lowering administrative expenses, and increasing transparency. Choi Woon-jae, executive vice president at NH NongHyup, remarked that the stablecoin approach "shows how blockchain can deliver real improvements to customer service and enhance national competitiveness," with intentions to broaden the system in line with forthcoming regulatory standards, as stated in the
South Korea’s stablecoin initiatives are gaining
This pilot is part of a wider movement among financial institutions to adopt blockchain. NH NongHyup’s project follows similar efforts, including Woori Financial Group’s collaboration with Samsung and its investment in BDACS, a KRW1 stablecoin provider, as reported by
As lawmakers move quickly to establish regulatory frameworks, the government is under pressure to act promptly to remain competitive with countries like the U.S. and Japan. Legislators, including Min Byoung-dug, a proponent of President Lee Jae-myung’s KRW-based stablecoin policy, argue that "the technology is mature, and market demand is clear," stressing the importance of swift implementation, as reported by
NH NongHyup’s project highlights the increasing integration of conventional banking with blockchain technologies, potentially transforming financial services for both local and global users.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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