Viva Republica, operator of South Korean fintech app Toss, is launching a blockchain-based digital financial infrastructure technology validation to review the feasibility of developing a won-pegged stablecoin.

Toss said on Tuesday it signed a three-way memorandum of understanding with global Layer 2 blockchain Optimism and privacy solution developer Sunnyside Labs to explore the feasibility of developing a won-pegged stablecoin.

The three companies will conduct a proof of concept, or PoC, over the next 3 months. The test will examine whether OP Stack, a core Optimism technology, can be applied to domestic blockchain-based digital financial infrastructure.

Key items in the validation include whether financial institutions can control payments and settlements, whether KYC and anti-money laundering requirements can be implemented technically, and whether transaction information can be protected in a public network environment. The focus is whether blockchain infrastructure can meet regulatory compliance and security standards required by the regulated financial sector.

Toss plans to use the agreement to review whether financial infrastructure requirements such as payments and settlements, KYC, anti-money laundering and protection of transaction information can be combined with blockchain technology.

Kyle Jenks (카일 젠키), Optimism's chief business officer, said, "We will demonstrate the performance and privacy standards of OP Stack to meet Toss' sophisticated technical requirements."

Kyuha Kim (김규하), Toss' chief business officer, said, "Strict regulatory compliance and strong privacy protection are essential for Web3 technology to be successfully integrated into regulated finance." He added, "We will use Optimism's proven OP Stack to validate the possibility of building a highly reliable compliance-based digital financial infrastructure."