South Korean payments provider NHN KCP has entered into a memorandum of understanding with Ava Labs to develop a payments-focused Layer 1 blockchain on the Avalanche network, marking a step toward integrating blockchain infrastructure into real-world payment systems.
The alliance focuses on building a private mainnet tailored to commercial transactions, with an emphasis on speed, data security and customization at the merchant level. The project uses Ava Cloud, a service that allows enterprises to deploy and manage their own Layer 1 blockchains.
Development of payment networks
Under the agreement, NHN KCP and Ava Labs will work together to create a network specifically designed for payment use cases. The proposed system is expected to support sub-second payment authorization, in addition to encrypted on-chain transaction data. The infrastructure will also enable merchants to customize payment environments and become part of a broader network designed to meet various commercial requirements.
The companies indicated that a proof of concept will take place in the first phase to assess the technical feasibility of the network. This phase is intended to validate performance and functionality before a broader rollout. At the same time, both sides plan to expand cooperation with financial institutions and payment companies as development progresses.
Jun Seok Park, CEO of NHN KCP, stated that the agreement combines the company’s experience in payment business with blockchain infrastructure to establish a model applicable for commercial use. Meanwhile, Justin Kim, head of Asia at Ava Labs, noted that the timeline for launching the Layer 1 network will depend on the outcome of South Korea’s pending cryptocurrency regulations.
Wider expansion of digital payments
In addition to Layer 1 development, the partnership plans to explore digital commerce applications including tokenized deposit systems, multi-stablecoin settlement frameworks and cross-border payment solutions.
The move follows Avalanche’s recent activities in South Korea. KB Kookmin Card, one of the country’s largest credit card providers, recently announced plans to develop a hybrid payment system using the Avalanche infrastructure. The system aims to link traditional credit card services with digital wallets, allowing payments with both stablecoins and credit cards.
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