KB Kookmin Bank has become the first South Korean commercial bank to complete a cross-border payment test using foreign currency-based deposit tokens, partnering with Japan's MUFG Bank through Project Agora. The bank announced Thursday that it successfully verified a cross-border payment scenario using Japanese yen-based deposit tokens with MUFG Bank, marking a significant milestone in global payment infrastructure development. According to KB Kookmin Bank, this test represents the first time a South Korean commercial bank has conducted a foreign currency-based deposit token payment test with an overseas partner - even as the legal framework governing such services has yet to be finalized domestically. The bank gained technology and operational experience needed to help build next-generation global payment infrastructure and plans to continue participating in subsequent phases of Project Agora in compliance with relevant laws and regulatory frameworks.
South Korean banks have successfully completed live trading tests using tokenized central bank reserves under the Bank for International Settlements-led Project Agora, marking a significant advancement from previous testing phases. According to the latest announcement, 28 institutions participated in the live trading test, including the Bank of Korea, various central banks, and private financial institutions, covering six currencies: the Korean won, US dollar, Euro, British pound, Swiss franc, and Japanese yen. The participating institutions conducted live trading tests worth approximately 800,000 Swiss francs, covering multiple currencies and testing a total of 17 transaction scenarios. The Bank of Korea stated that the Agora project plans to conduct more real transaction tests in the future by identifying transaction types and scenarios not covered in this test. The Bank of Korea confirmed that key functions of the platform operated stably even in an environment similar to actual operations, with the overall transaction volume processed in an average of 1 minute and 20 seconds from transfer instruction to final settlement.
The latest cross-border testing builds on South Korea's efforts to extend Project Hangang beyond institutional pilots and into commercial payment infrastructure. As previously reported, the Ministry of Science and ICT and the Korea Internet & Security Agency launched a 9.6 billion won program earlier this month to connect Project Hangang with the country's existing payment network. The initiative is led by the Korea Financial Telecommunications and Clearings Institute and includes nine commercial banks, payment gateway providers and large merchants testing deposit token payments for everyday retail transactions. The Bank of Korea confirmed it will continue to actively participate in Project Agora while reviewing ways to integrate and ensure interoperability between its Project Hangang tokenization platform and the Agora platform, allowing banks to issue deposit token wallets while merchants continue using current point-of-sale systems. The latest testing demonstrated that even in a situation where the platform was not fully connected to existing payment networks and bank computer systems, the progress and processing paths of transactions could be verified in real time.
The successful testing follows Governor Shin Hyun-song's digital finance agenda announced after he took office in April. In his inaugural speech, Shin said the Bank of Korea would continue expanding Project Hangang while participating in international initiatives such as Project Agora to strengthen cross-border payment infrastructure and support the Korean won in digital finance. Although lawmakers have continued drafting stablecoin legislation under the proposed Digital Asset Basic Act, Shin's speech focused on wholesale CBDCs and tokenized bank deposits rather than privately issued stablecoins. His earlier work at the Bank for International Settlements argued that multiple privately issued stablecoins could fragment payment systems, though later reports indicated he had become more open to stablecoins operating alongside CBDCs under an appropriate framework.
While the central bank continues testing tokenized reserves and deposit tokens, lawmakers and financial regulators have been developing a separate legal framework for stablecoins. The Financial Services Commission recently told the National Assembly that it intends to consolidate ten pending digital asset proposals into a single Digital Asset Basic Act covering stablecoin issuance, exchanges, disclosures, governance and operational resilience. The regulator has not published a final draft or announced a submission date. Separately, a policy report published by Hashed Open Research and the Solana Policy Institute recommended introducing interim licensing guidance for won-backed stablecoins before the full legislation is completed, with participants at the June symposium arguing that temporary rules could help regulated businesses prepare for stablecoin issuance while lawmakers continue negotiating the final framework.
