Shinhan Financial and Visa to Test Stablecoin Payments in South Korea

Shinhan Financial Group and Visa are preparing to test stablecoin-based payment functions in South Korea, including issuance, transfers and redemption, as financial institutions examine how digital assets could fit into existing payment systems.

According to a local report published on Wednesday, the companies signed a strategic memorandum of understanding at Shinhan Financial’s headquarters in Seoul. The initial work will focus on testing core stablecoin functions through Visa’s platform before the companies assess potential applications for the Korean market.

The agreement also covers remittances, card settlement, AI-based payments and business-to-business transactions.

Stablecoin pilot will start with basic functions

The first phase will examine whether stablecoins can be issued, transferred and redeemed within South Korea’s financial and regulatory environment. Shinhan and Visa have not disclosed which stablecoin will be used, the size of the pilot, or when testing will begin.

The results will be used to assess which applications could be developed for the Korean market. The initiative therefore remains at the testing stage and does not represent the launch of a new stablecoin product.

Remittances and card settlement under review

The companies are also examining how stablecoins could interact with existing payment infrastructure. 

One potential application is cross-border remittances, where stablecoins could be used to transfer value between financial institutions before conversion into local currency. Card payment settlement is another area under review, although the companies have not disclosed how stablecoins would be incorporated into the process.

The initiative is focused on evaluating digital-asset applications within existing financial services rather than introducing a cryptocurrency trading product.

Visa’s stablecoin strategy

The partnership comes as Visa expands its work on stablecoin infrastructure.

During its July 29 earnings call, Visa said it was working across several parts of the stablecoin ecosystem, including issuance infrastructure, tokenized deposits and payment applications. The company reported $11.6 billion in fiscal third-quarter revenue.

Visa has also developed infrastructure for stablecoin issuance, movement and redemption. The Shinhan pilot gives the company another banking partner through which those capabilities can be tested in a market where stablecoin rules are still being developed.

The Visa strategy is separate from the Shinhan pilot, and the partnership does not indicate that any particular stablecoin or payment product will be launched in South Korea.

AI payments also part of the agreement

The MOU extends beyond stablecoins to AI-based payments, as well as potential B2B and business-to-consumer applications. The companies have not provided technical details about the proposed AI payment systems or explained how stablecoins would be used in those transactions.

Discussions between Shinhan and Visa executives began earlier this year and later expanded to cover stablecoins, payments and other digital-finance applications.

Shinhan Financial Chairman Jin Ok-dong said the companies would examine new financial models using their respective infrastructure. “We will combine Shinhan’s financial capabilities with Visa’s global infrastructure to design new future finance models.”

South Korea is testing other stablecoin infrastructure

The Shinhan-Visa initiative follows other stablecoin experiments involving South Korean financial institutions.

A separate stablecoin proof-of-concept involving iM Bank and Finger selected BTQ’s post-quantum security infrastructure to test security for a Korean won stablecoin. The project is focused on areas including stablecoin issuance, reserve reconciliation, and transaction security.

The BTQ initiative differs from the Shinhan-Visa pilot. While Shinhan and Visa are testing core stablecoin functions and potential payment applications, the iM Bank project focuses more heavily on the security infrastructure supporting a bank-linked stablecoin.

Both developments remain at the testing stage and do not represent commercial stablecoin launches.

Regulation could determine the next step

The initiatives are developing as South Korea works toward clearer rules for stablecoins and other digital assets.

The eventual regulatory framework could determine which financial institutions can issue stablecoins, how reserves are managed, and how digital assets can be used within payment systems.

For Shinhan and Visa, the immediate focus remains on testing issuance, transfers, and redemption while examining potential applications in remittances, settlement, and automated payments. Whether those tests lead to commercial services will depend on their results and the regulatory framework ultimately adopted in South Korea.

Also Read: Revolut Rolls Out Euro-Backed EURR Stablecoin in Three Markets

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