South Korea Tests Blockchain Stablecoin in Government-Backed Pilot

South Korea is taking a step closer to adopting blockchain technology in its financial sector. Gyeonggi Province, the country's most populous province, has launched a government-backed pilot program to test a blockchain-based stablecoin. The eight-month proof-of-concept program, led by ZKrypto, will examine the use of the stablecoin for regional currency and government disbursements.

The initial stage of the pilot will focus on testing the core functions of the stablecoin, including issuance, circulation, and settlement. In the second phase, scheduled to take place between October and December, the project will explore fraud prevention measures, privacy protections, and the possibility of using the stablecoin across public benefit programs.

To support the pilot, ZKrypto will use zero-knowledge proof technology to prevent duplicate spending while protecting user privacy. Proof-of-reserves technology will also be used to verify reserve assets in real-time throughout the testing process.

The government-backed pilot follows several private-sector initiatives announced recently as South Korean companies continue testing blockchain payment infrastructure. Toss and KT have launched separate initiatives to develop infrastructure for won-based stablecoins, with KT investing 18 trillion won ($13.2 billion) over the next three years in artificial intelligence, networks, information technology, and cybersecurity.