A South Korean payments company has partnered with Avalanche to create a cryptography-style Layer 1 blockchain specifically designed for payments.
A crypto-spin for TradFi in South Korea
TradFi continues its race to not be left behind when it comes to DeFi innovation. This time, however, the traditional payments giant’s most recent move is not just about integrating with crypto, but creating its own chain aimed at real-world payments.
According to The Block, NHN KCP, one of South Korea’s largest payment processors, has signed a memorandum of understanding with Avalanche developer Ava Labs to create its own payments-focused Layer 1.
Avalanche is a high-performance Layer 1 blockchain platform designed for smart contracts and custom blockchains, with near-instant transaction finality and low fees.
The planned L1 will be built through Ava Cloud and optimized for real-world payments: sub-second payment authorization, on-chain transaction data encryption, and customizable payment infrastructure for merchants. NHN KCP and Ava Labs want to integrate tokenized deposits, multi-stablecoin settlement and cross-border payments on top of this base layer.
Jun-seok Park, CEO of NHN KCP, said in a statement:
This agreement is very significant as it combines the industry-leading payment operational expertise of NHN KCP with world-class blockchain technology to generate an innovative model that can be immediately applied to real-world businesses.
Both partners intend to test whether the project is technically viable through a proof of concept and expand their ties with financial and payment companies around the world.
South Korea’s most recent history with crypto
According to Korean media outlet Fntimes, NHN KCP is already positioning itself as a “first mover” in the crypto payments space and has been working on stablecoin infrastructure and access/egress technology with a dedicated working group. The payments company has already filed trademarks for KRW and USD-pegged stablecoins (e.g. USDW), signaling that it wants to operate on both domestic and international rails.
South Korea has recently pushed for clear rules for stablecoins and digital assets, with hopes that a comprehensive crypto bill and bank-level rules for exchanges and payment providers will arrive this year after being postponed until after local elections on June 3. Bitcoinist reported on this earlier this month.
What this means for AVAX traders
Let’s keep in mind that the timing and scale of the launch will depend heavily on how South Korea finalizes its crypto and stablecoin framework, something Ava Labs itself acknowledges.
If NHN KCP manages to route even a small portion of its existing volume through an Avalanche-based mainnet, it could become one of the largest “real payments” experiments on any L1. AVAX could start to look like a real payout bet, which the market tends to reward with higher multiples in bullish phases.
If the proof of concept leads to actual merchant traffic, AVAX gains a concrete adoption case that traders can track in metrics and stories, making it easier for funds to justify transitioning slower-growing L1s to Avalanche.
At the moment of writing, AVAX trades for $9,43 on the daily chart. Source: AVAXUSDT on Tradingview.
Cover image of Perplexity. AVAXUSDT chart from Tradingview.
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