KB Kookmin Bank has completed a validation of cross-border payment scenarios using foreign-currency-based deposit tokens with Japan's MUFG Bank. It was the first time a South Korean commercial bank tested deposit token payments with an overseas bank.

KB Kookmin Bank said on Wednesday it successfully completed the validation as part of Project Agora, a global cooperation initiative jointly promoted by the Bank for International Settlements (BIS) and the Institute of International Finance (IIF).

Project Agora is a global public-private cooperation project that uses deposit tokens and tokenised central bank reserves to verify the efficiency and stability of cross-border payments.

Major central banks, including the Bank of Korea, and global financial institutions are taking part to examine possible uses and operating models for next-generation payment infrastructure.

It differs from Project Hangang, which aims to build domestic payment infrastructure, in that it targets cross-border payment environments.

KB Kookmin Bank said it worked with MUFG Bank in the validation process to test payment scenarios using yen-based deposit tokens. It said it was the first South Korean commercial bank to validate deposit token-based services, which are still before the legislation stage, with an overseas bank using a foreign currency.

KB Kookmin Bank said the test helped it secure technology and operational experience needed to build next-generation global payment infrastructure.

It said it plans to take part in follow-on phases of Project Agora while complying with related laws and systems such as innovative financial services, and with guidelines from supervisory authorities.

A KB Kookmin Bank official said, "It is a meaningful cooperation project in which global financial institutions together validate the potential of next-generation global payment infrastructure." The official added, "We will continue to respond proactively to changes in the global financial environment and strengthen our digital financial competitiveness."