KB Kookmin Bank and Woori Bank join Phase 2 of Korea-Japan stablecoin remittance 'Project Pax'

KB Kookmin Bank and Woori Bank will join the Phase 2 technology verification (POC) of 'Project Pax', an overseas remittance project using stablecoins promoted by Japanese financial firms.

On the 23rd, industry sources said KB Kookmin Bank recently submitted a letter of intent to participate in Phase 2 of Project Pax. Woori Bank is also reported to have completed internal decisions and confirmed participation. Existing participants include Shinhan Bank, NH Nonghyup Bank, and K Bank; with the addition of the two banks, Korea-Japan stablecoin remittance testing is being expanded around major commercial banks.

Project Pax is led by Progmat, a joint venture established by Mitsubishi UFJ Trust and Banking Corporation (MUFJ), Mizuho Bank, and Sumitomo Mitsui Banking Corporation (SMBC), and tests a structure that directly sends and receives stablecoins between Korea and Japan. Although it is blockchain-based remittance, it is characterized by using the Society for Worldwide Interbank Financial Telecommunication (SWIFT) messaging framework as is, allowing existing regulations such as KYC and AML to be maintained.

The increase in participation by domestic banks is interpreted as a response to the full-scale discussions on the institutionalization of stablecoins. In Phase 2 POC, enhancements to SWIFT integration, application of payment-versus-payment (PvP), and expansion of live transaction testing are expected to be carried out.