NHN KCP partners with Avalanche to build South Korea's payment Layer 1, targeting next-second confirmation

Korean payment service provider NHN KCP and Avalanche developer Ava Labs have signed a memorandum of understanding (MOU) to jointly develop a Layer 1 network centered on payments, with plans to establish the mainnet through Ava Cloud services. This collaboration focuses on three major technical pillars: ultra-fast payment authorization in under one second, on-chain encryption of transaction data, and payment ecosystem infrastructure that merchants can customize.

Three major technical pillars: the design core of NHN KCP Layer 1

NHN KCP CEO Jun-seok Park said that this collaboration will combine NHN KCP’s industry-leading payment operations expertise with world-class blockchain technology to form an innovative model that can be directly applied to real-world business scenarios. The two sides plan to first confirm the technical feasibility of the joint project through a proof of concept (PoC), and then expand connections with networks of global financial and payment companies.

Layer 1 three core technology directions

Ultra-fast payment authorization: Compress the payment confirmation time for each transaction to within one second, achieving near-instant settlement speeds that traditional payment networks can hardly match.

On-chain transaction data encryption: While maintaining auditability, encrypt transaction data on-chain, balancing compliance requirements with privacy protection.

Customizable merchant infrastructure: Provide merchants with a payment ecosystem that can be tailored to business needs, lowering the technical barrier for blockchain integration.

Collaboration scope expansion: Tokenized deposits, stablecoins, and cross-border payments

In addition to building the Layer 1 mainnet, NHN KCP and Ava Labs also announced that they will jointly explore multiple emerging opportunities in digital commerce, covering business rollout of tokenized deposit models, the design of settlement architectures for multi-stablecoin setups, and the development of cross-border payment applications. These directions all point to an on-chain upgrade of traditional financial infrastructure, extending Avalanche’s overall strategic rollout in the Korean market.

Deepening its focus on Korea: market context from the KB Kookmin Card partnership

This collaboration by NHN KCP is the latest example of Avalanche’s systematic布局 of the Korean financial market. Last month, KB Kookmin Card, one of South Korea’s largest credit card companies, announced its partnership with Avalanche to develop a hybrid stablecoin payment model. The goal is to build a new system that links credit cards and digital wallets, allowing users to use stablecoins and traditional credit card payments on the same credit card at the same time.

The two partnerships were announced in succession within a short period of time, showing that Avalanche is actively migrating Korea’s traditional financial infrastructure into its blockchain ecosystem. It is targeting regulated financial institutions rather than native crypto companies as its primary partners, thereby building a more solid entry barrier from a regulatory standpoint.

Frequently asked questions

What type of company is NHN KCP, and why choose Avalanche to build Layer 1?

NHN KCP is a payment service subsidiary under South Korea’s NHN Group, focused on online payment processing. Its service scope covers multiple e-commerce and business scenarios. The main reason for choosing Avalanche is the customizable Layer 1 deployment capability provided by Ava Cloud, enabling NHN KCP to establish a dedicated payment mainnet under Avalanche’s consensus mechanism without building underlying blockchain infrastructure from scratch.

How is the launch timeline for Korea’s payment Layer 1 determined?

There is currently no clear date for the launch timeline. Justin Kim, head of Ava Labs Asia, explicitly stated that the timeline will depend to a large extent on the legislative progress of the cryptocurrency regulatory framework that South Korea is about to roll out. At present, the two sides plan to first complete the proof of concept (PoC) stage, confirm technical feasibility, and then move into the official mainnet deployment process.

What is the practical significance of tokenized deposits and multi-stablecoin settlement for cross-border payments?

Tokenized deposits involve issuing bank deposits as on-chain tokenized assets, enabling real-time settlement on the blockchain and bypassing delays from traditional bank clearing systems. A multi-stablecoin settlement architecture allows stablecoins of different denominations to be cleared across borders on the same infrastructure directly, reducing friction costs and fees for cross-border payments. This is one of the directions in the collaboration that has the most direct commercial rollout potential.