Kakao Group, including Kakao Corp, Kakao Pay and KakaoBank, is joining hands with global fintech firm Circle to review the possibility of building blockchain-based payment and settlement infrastructure, including a won stablecoin.

Kakao Group said on Wednesday it signed a memorandum of understanding with Circle Internet Group for strategic cooperation in digital asset technology.

The two companies plan to combine Kakao Group's digital platforms and financial services with Circle's experience in developing blockchain and global payments infrastructure to identify business opportunities in payments, settlement and digital asset-linked areas.

They also agreed to jointly review the commercialisation potential of won-based digital assets and tokenised financial services in line with changes in the domestic regulatory and market environment.

They will also review global payments, overseas remittances and merchant settlement measures using Circle's payments infrastructure. Discussions will include technical cooperation to improve interoperability between blockchain networks and existing financial systems.

Kakao Group plans to pursue building a digital asset ecosystem by linking Kakao Pay's payment services and KakaoBank's financial services based on KakaoTalk.

It also plans to review ways to create shared infrastructure that would allow domestic operators to develop stablecoin-based services, in addition to its own won stablecoin business.

Kash Razzaghi (카쉬 라자기), Circle's chief commercial officer, said he hopes to explore opportunities for financial innovation that fit the regulatory environment by combining Circle's global infrastructure with Kakao Group's platform and financial services ecosystem.

Won-geun Shin (신원근), CEO of Kakao Pay and co-head of Kakao Group's stablecoin task force, said Kakao Group will work with Circle to prepare a Korean-style digital asset ecosystem based on its platform and payments and financial services experience.