Kakao to Add Stablecoin Functions to Wallet Used by 43 Million Users
Summary
- Kakao Pay said it has developed wallet technology that can store and trade stablecoins and other on-chain assets, and has completed a proof of concept for an integrated digital-asset wallet.
- Kakao Pay and KakaoBank said they will link payment and banking infrastructure to move early in the won-denominated stablecoin distribution market and build distribution infrastructure for digital-asset custody, remittance, payments and settlement.
- Kakao Group said it will supply its verified wallet technology to outside companies and financial institutions as an integrated solution and respond to regulatory changes as it works to build South Korea's digital-asset ecosystem.
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Kakao Group said on Sept. 9 that it has developed technology enabling users to store and trade on-chain assets, including stablecoins, through the Kakao Pay wallet. The company aims to move early in the won-denominated stablecoin distribution market by leveraging the payment infrastructure of Kakao Pay and the banking infrastructure of KakaoBank.
Kakao Pay announced the same day that it had completed a proof of concept for an integrated digital-asset wallet. The project centers on expanding the existing Kakao Pay Money wallet to handle digital assets, including stablecoins.
The Kakao Pay wallet is used by about 43 million subscribers to store prepaid balances and make payments. The company tested the transfer, payment and settlement process for digital assets by adding blockchain functions to the existing wallet environment used by a large customer base. It also built related screens and user procedures to make it easier for users to manage on-chain assets.
KakaoBank is also working to link the wallet with its banking system. It is reviewing system stability and user convenience based on the security standards and regulatory requirements applied to banks. The company plans to verify the technology across both the payment platform and the internet bank, building distribution infrastructure spanning digital-asset custody, payment and settlement.
Kakao Group plans to supply the verified wallet technology to outside companies and financial institutions. It will offer an integrated solution combining technical support and consulting so client institutions can design and operate wallets tailored to their business structures and regulatory requirements.
The solution will also include design and operating measures that can respond to regulatory changes, given that laws and institutional rules related to stablecoins have yet to be finalized. Kakao Group said it is discussing cooperation with domestic companies and financial institutions considering the adoption of won-denominated stablecoins and digital assets.
Kakao Group is focusing first on distribution rather than issuance, prioritizing the securing of actual merchants and users. It believes that combining Kakao Pay's payment network with KakaoBank's financial infrastructure will allow it to quickly offer custody, remittance and payment services for won-denominated stablecoins once the market is institutionalized.
"The value of digital assets emerges in the distribution process where they are actually used, rather than in issuance itself," Shin Won-keun, chief executive officer of Kakao Pay and co-head of Kakao Group's stablecoin task force, said. He added, "Based on our wallet technology and experience responding to regulation, we will work with a range of partners to build South Korea's digital-asset ecosystem."
