Proof of Concept with Korean financial institutions for stablecoin "Project Pax"
Progmat, Fairsquarelab, and Korea Digital Asset Custody have signed a Memorandum of Understanding regarding a proof of concept for "Project Pax," a cross-border remittance infrastructure project for stablecoins in collaboration with Swift.
Through this PoC, the companies will advance the connection of infrastructure for stablecoin remittance between Japan and Korea, while also identifying key issues for Korean financial institutions' participation in Project Pax and compiling suggestions and recommendations for legal framework development in Korea.
Background and Objectives
Project Pax aims to build a cross-border SC remittance infrastructure that addresses various challenges such as AML/CFT, regulatory compliance, parallel operations with existing systems, and wallet usage by corporations by leveraging Swift's existing assets and partnerships with financial institutions in various countries. Progmat and its partner Datachain are promoting this project and have been advancing partnerships with relevant organizations in various countries since its launch.
Fairsquarelab is a blockchain-related company in Korea and a pioneer that has been developing Korea's security token mainnet and related technologies. Korea Digital Asset Custody is Korea's largest custody service provider, established through joint investment by major Korean financial institutions including Shinhan Bank and NH Bank, along with Fairsquarelab.
Both companies, which aim to build a common digital asset infrastructure in Korea, decided to fully enter the stablecoin sector and participate in Project Pax following the Korean Financial Services Commission's indication of a proactive stance toward global digital asset trends on January 15, 2025, leading to the signing of this MOU with Progmat.
Specific Collaboration Details and Expected Outcomes
This PoC will conduct practical verification for Korean financial institutions to implement the infrastructure being built through Project Pax. Specifically, it will verify the feasibility of system and operational responses at Korean financial institutions and establish an action roadmap by identifying implementation issues.
In Korea, the legal framework for stablecoins is still in the development stage. By identifying potential issues in advance, this initiative aims to facilitate necessary environmental preparations in Korea and enable smooth commencement of SC remittance after the legal framework is established.
For Progmat, this represents an opportunity to establish connections with Korean financial institutions as Project Pax partners while advancing sophisticated Japan-Korea financial transactions through strengthened business collaboration, including potential future connections in the ST sector in the Korean market.
Role of Each Participant in this PoC
| Participating Company | Role |
|---|---|
| Progmat | Overall PoC promotion and coordination; Technical verification of Korean environment connection in collaboration with Datachain |
| Datachain | Joint implementation of technical verification |
| Fairsquarelab | Coordination of related companies in Korea and project promotion lead |
| Korea Digital Asset Custody | Verification of system and operational feasibility |
| Korean Financial Institutions | Verification of system and operational feasibility |
| Japanese Financial Institutions | Practical review of verification |
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