South Korea’s BC Card enables stablecoin payments for foreign users

South Korean payments company BC Card has concluded its pilot program testing how foreign consumers can pay domestic merchants using stablecoins. The initiative assessed the stability and practicality of integrating digital currencies into the Northeast Asian country’s payment ecosystem. 

According to a press statement published on BC Card’s website late Tuesday, the two-month-long pilot was conducted in partnership with blockchain financial firm Wavebridge, international digital wallet provider Aaron Group, and cross-border remittance company Global Money Express.

BC Card completes testing phase for foreign stablecoin remittances locally 

In September, BC Card filed a patent for the technology to facilitate stablecoin payments, becoming the first company in the South Korean market to do so. The system calculates the exact number of coins to be deducted from a customer’s digital wallet, accounting for price fluctuations in exchanges, so consumers pay only the necessary amount.

During a press briefing at the time of the patent filing, the  president of BC Card, Choi Won-seok, said stablecoins are “a powerful paradigm that can transform existing payment processes.” 

“As the operator of Korea’s largest payment network, BC Card will lead efforts to create an environment where stablecoin payments can be used anywhere with ease,” Choi told reporters.

The South Korean payment giant has now completed the program, saying it “verified whether foreign currency-based stablecoins held by foreigners could be used within the domestic payment environment.” 

The demonstration involved converting stablecoins held in overseas wallets into digital prepaid cards, then using the currency-pegged coins at local cafes and supermarkets through only a QR code, similar to its cross-border payment system with Thailand’s Bangkok Bank.

In July, Bangkok Bank and South Korea’s BC Card partnered to launch cross-border QR payments between Thailand and South Korea. South Korean users of the Paybooc app can now make instant QR payments while in Thailand, with transactions processed using real-time exchange rates, according to the companies’ press release.

The stablecoin pilot program also incorporated payments into BC Card’s existing card approval and settlement system. This allowed merchants and customers to complete transactions in the same manner as traditional card payments.

According to BC Card executives, the technical verification test is a preparatory step for creating a stablecoin payment structure in preparation of changes in domestic laws and financial regulations. The company also mentioned it would continue collaborating with crypto-affiliated organizations to help develop a “Korean-style stablecoin payment infrastructure.” 

“BC Card is based on a card payment infrastructure and is in line with the domestic legal and institutional environment. We will prepare a stable stablecoin payment model step by step,” the firm’s president reiterated.

South Korea stablecoin legislative debates on issuance continue 

While BC Card pushes forward with stablecoin adoption, South Korea’s government officials are still debating stablecoin regulation, the Digital Asset Basic Act, specifically who should be authorized to issue won-denominated stablecoins.

The Bank of Korea (BOK) supports restricting issuance to consortia led by commercial banks holding at least 51% of stakes, but the Financial Services Commission (FSC) advocates for the inclusion of nonbank entities like fintech and blockchain firms, arguing this could boost innovation and expand the digital asset industry.

Members of the ruling Democratic Party of Korea (DPK), like Representative Ahn Do-geol, and most of the 20 external advisers in the discussions are worried about the proposed governance structure.

The governing party had asked the FSC to submit a government-backed bill by the end of this year, but the disagreements between the BOK and the FSC have delayed the bill’s presentation until early next year. 

At a Monday meeting of the DPK’s task force, stablecoin issuance was profoundly discussed and the BOK’s proposal was the central topic of debate. 

“It is also hard to find global legislative precedents in which institutions from a specific sector are required to hold a 51 percent stake,” Ahn surmised, speaking to news publications after the meeting. Opponents believe the queries over financial stability should be answered by alternative regulatory and technological steps, not by restricting issuance to banks. 

“Issuers should be selected based on their ability to advance innovation rather than their institutional classification,” the member of the party’s digital asset task force concluded.

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