Korea’s Digital Payment Experiments Enter Real Transactions (ASA News #25)

Korea’s expanding digital payment experiments lead this week’s ASA News, alongside China’s dual push on RMB cross border payments and digital yuan infrastructure and HashKey’s move to link trading and clearing from Hong Kong to Singapore on one platform.

1. Korea’s Central Bank Digital Payments Experiments Expand Into Real Transactions and Private Sector Payments

Source: Bank of Korea Leads Digital Payments Innovation... Successful International Transaction Test

Key Update

• On July 30, the Bank of Korea announced that it had participated in real transaction testing for Project Agora, a public and private sector initiative led by the BIS and the Institute of International Finance (IIF) involving central banks from eight jurisdictions and more than 40 financial institutions. The test involved whether wholesale central bank digital currency and deposit tokens can reduce the time and cost burdens of the current cross border remittance structure.
• In the same week, Toss Payments was selected as the preferred bidder for a project to expand deposit token based payment infrastructure promoted by the Ministry of Science and ICT and the Korea Internet & Security Agency, led by the Korea Financial Telecommunications and Clearings Institute and involving nine banks, eight electronic payment gateway providers, and two large demand side participants.
• Danal was selected as a participating institution in the same project, NHN KCP and Shinhan Bank began verifying deposit token payments in the second phase of Project Hangang, and Coupang and Woori Bank completed a technical verification of real time payments and settlement based on a Korean won stablecoin in an environment similar to a real service.
• KB Kookmin Bank also moved to launch a blockchain based cross border payment service by connecting with JPMorgan’s Kinexys, as central bank led experiments, private deposit token payments, and connections to global bank networks proceed simultaneously.

Commentary: The Moment Central Bank Experiments Move Into Private Payment Networks

Central bank experiments are moving down into private payment networks, with Coupang, Toss Payments, Danal, and NHN KCP all appearing in the same week. Korea is testing two rails at once: a unified ledger model built on bank deposit tokens and a privately issued model built on Korean won stablecoins.

Because infrastructure is forming before legislation, later laws are likely to recognize already functioning pathways rather than redesign them. The key question is whether deposit tokens and Korean won stablecoins remain competitors or settle into a dual structure separated by use case.

2. China Pushes Forward RMB Cross Border Payments and Digital Yuan Infrastructure Together

Source: People’s Bank of China Promotes Construction of RMB Cross Border Payment System and Improves Digital Yuan Cross Border Infrastructure

Key Update

• The People’s Bank of China said it is promoting the construction of an RMB cross border payment system and set out a policy direction to further improve the underlying infrastructure for cross border use of the digital yuan, treating the RMB international payment network and central bank digital currency infrastructure as parts of a single payment strategy.
• China has strictly controlled the use and trading of private stablecoins while steadily expanding approaches that combine the digital yuan with RMB payment networks in cross border payments, trade finance, and capital controls, reaffirming a digital money strategy that prioritizes state payment infrastructure over private token issuance.
• During the same period, a research team at the People’s Public Security University of China developed an artificial intelligence system capable of tracking Bitcoin money laundering with roughly 90% accuracy, which connects to the Supreme People’s Procuratorate’s statement last year that it had prosecuted 3,259 people on charges of money laundering using virtual currencies and underground banks.
• The latest message shows both the expansion of payment infrastructure and the control of illicit fund flows, broadening cross border use of the RMB and digital yuan while tracking the potential use of permissionless digital assets for money laundering.

Commentary: A Digital Money Strategy Without Private Issuance

China is expanding digital use of the RMB through its central bank and state payment infrastructure rather than through private stablecoin issuers. Payment networks, central bank digital currency, capital controls, and illicit fund tracking move as one policy bundle, and the AI based money laundering tracking news fits this pattern.

This approach places control and traceability ahead of speed and struggles to match the network effects of private stablecoins. If demand for RMB payments grows in real trade and finance, digital yuan infrastructure could become the operating system for a Chinese style cross border payment order.

3. HashKey Links Trading and Clearing From Hong Kong to Singapore on One Platform

Source: HashKey Integrates Exchanges... Shifts to Locally Regulated Operations

Key Update

• HashKey Holdings announced that it will integrate HashKey Exchange and HashKey Global into a single platform and app under a “single entry, local compliance” model, in which users share one application while receiving separate regulatory and compliance management based on the legal standards of each region.
• The integration points toward bringing key jurisdictions such as Hong Kong, Singapore, the Middle East, and Bermuda under one operating structure, integrating the frontend while separating regulatory responses by jurisdiction and combining multiple licenses with jurisdiction specific regulatory compliance.
• In the same week, HashKey’s wholly owned subsidiary HKDAG Singapore signed a nonbinding framework agreement with Asia Pacific Exchange, an exchange holding an Approved Exchange license from Singapore’s MAS, regarding the possibility of acquiring the entire company to expand institutional trading and clearing businesses in Singapore.
• The moves suggest HashKey is attempting to bring institutional trading, clearing, and license based operations into one group, combining Hong Kong’s retail and institutional trading base with Singapore’s exchange license and clearing functions.

Commentary: Combining a Single App With Multiple Licenses

HashKey is attempting to operate multiple jurisdictions like one financial infrastructure platform, with a single app and local compliance in each region. If the APEX acquisition connects Hong Kong and Singapore, HashKey could vertically integrate trading, custody, clearing, and regional compliance across Asia.

A Japan style model contained in one group offers regulatory predictability but limited regional reach, while the HashKey model offers access across jurisdictions but must continuously absorb regulatory differences. For institutional investors, the choice is between entry into a single market and connectivity across multiple markets.

4. Other News

This section summarizes other news from the period related to Asian RWA, stablecoins, tokenization, and digital asset infrastructure.

4.1 Theme 1. Korean Won Stablecoin Legislation and Competition Among Operators

4.1.1 Naver vs. Kakao: Competition Heats Up to Secure an Early Lead in Korean Won Stablecoins

• Expectations for the institutionalization of Korean won stablecoins are growing as the National Assembly resumes discussion of the Digital Asset Basic Act, with Naver and Kakao competing to secure early leadership based on payments, settlement, and distribution networks, and the core of domestic competition shifting from simple issuance to real use cases and onchain distribution networks.

4.1.2 Argument for Implementing Stablecoin Rules First... Can It Break the Legislative Bottleneck Around the Basic Act?

• Hashed Open Research and the Solana Policy Institute recommended a phased introduction of stablecoin regulation, including expanded regulatory flexibility for issuers and provisional guidance related to authorization, reflecting a trend to open issuance rules first, before completion of the Basic Act, to give the market preparation time.

4.1.3 "For Stablecoins, It Makes Sense to Move From Bank Centered Issuance to Nonbank Expansion"... National Assembly Research Report

• A National Assembly research report proposed a phased approach of allowing banks first, then expanding to nonbanks, identifying issuer eligibility as the biggest issue in legislating Korean won stablecoins and signaling that Korea’s discussion has entered a market formation phase centered on the choice of issuers.

4.2 Theme 2. Institutional Infrastructure Development in Japan and Hong Kong

4.2.1 Japan’s Major Onchain Shift: Digital Currency and Tokenization

• Japan separately regulates stablecoins as Electronic Payment Instruments under the Payment Services Act and has adopted a prior screening structure that limits issuers to banks, trust companies, and registered fund transfer service providers, showing the Japanese approach of establishing the system first and having the industry build products within it.

4.2.2 Hitachi Confirms Practicality Through Crypto Asset AML Pilot... New Service to Launch in October

• Hitachi conducted an AML pilot with 17 companies, including financial institutions and digital asset businesses, confirming the practical applicability of wallet risk assessment, post transaction monitoring, and token circulation tracking functions, with a service launch scheduled for October that moves Japan’s compliance infrastructure into the commercial stage.

4.2.3 Hong Kong Introduces First Quantum Security Review... Banking Sector Preparedness Reaches Only 2.3 Points

• The HKMA introduced a review framework for the banking sector to prepare for quantum computing threats, with the average preparedness score among surveyed institutions at a low 2.3 out of 10, a measure to manage cryptographic system risk institutionally as tokenized deposits and blockchain payments spread.

4.3 Theme 3. Stronger Regulatory Enforcement and Market Surveillance

4.3.1 Payment Suspension for Virtual Asset Accounts Suspected of Illegality... People Power Party’s Kim Sang Hoon Proposes Amendment to the Specific Financial Information Act

• The proposed amendment to the Specific Financial Information Act would allow financial authorities to request payment suspension for accounts suspected of transferring illicit property, defining the unique identification numbers of virtual asset service providers as accounts and potentially creating an enforcement framework that controls both bank accounts and digital asset accounts together.

4.3.2 Bitkub’s $50 Million Hack... Thailand SEC Report in Focus

• Thailand’s SEC filed a criminal complaint over allegations of inadequate reporting related to Bitkub’s 2021 hacking incident, which involved 1.7 billion baht, or about $50 million, and an outflow of 16 types of digital assets, as exchange incident disclosures and reporting obligations to regulators emerge as key issues in Asian regulatory enforcement.

4.3.3 Vietnam’s Ministry of Public Security Pushes Bill to Include Digital Assets Within Electronic Identity Verification

• Vietnam’s Ministry of Public Security is pursuing legislation to bring digital assets within the scope of electronic identity verification, incorporating digital asset holdings and transactions into an identity based management framework and potentially expanding regulation from exchange management to identity infrastructure management.

[ASA News] is a biweekly newsletter that summarizes key stablecoin news across Asia and shares views from industry participants. (2026.07.27~08.02)