Kyobo Life completes industry-first proof-of-concept for stablecoin-based insurance payments

Kyobo Life announced Wednesday that it has completed what it calls the industry's first proof-of-concept for won-denominated stablecoin-based insurance premium collection and claims payment services. The announcement followed a results-sharing event held June 19 at its Gwanghwamun headquarters in Seoul with blockchain infrastructure firm EQBR.

The PoC was undertaken to get ahead of anticipated legislation on won-denominated stablecoins and the potential expansion of the digital asset market. The two companies focused on integrating Kyobo Life's existing insurance systems with blockchain infrastructure to build out processes for paying premiums and disbursing claims using digital assets.

At the event, the companies unveiled the results of their 12-week joint PoC. They demonstrated automatic premium payments using won-denominated stablecoins held in a digital wallet, with transaction records reflected in real time in Kyobo Life's existing systems. Kyobo Life said the exercise confirmed the feasibility of linking conventional financial systems with blockchain technology.

If blockchain-based payment and disbursement systems are commercialized once the relevant regulatory regime and infrastructure are in place, the companies expect the speed and transparency of premium collection and claims processing to improve. Customers would be able to pay premiums through a digital wallet without separate bank transfers or card payment steps and confirm payment results instantly. Insurance claims could also be received via digital wallet, improving the overall convenience of financial transactions.

From the insurer's perspective, recording transactions on a blockchain would make it easier to track and verify payment and disbursement histories. Streamlining the existing transaction structure — which currently passes through financial institutions and payment service providers — could also reduce intermediary costs.

Kyobo Life said it plans to continue examining the potential of new financial tools, including won-denominated stablecoins and digital wallets, building on this PoC as a starting point.

Park Jin-ho, executive vice president of Kyobo Life, said legislation on won-denominated stablecoins is taking longer than expected but that the delay should be seen as an opportunity to prepare the technology and business models in greater detail. "We will continue to explore concrete ways to expand applicability through follow-up proofs-of-concept and apply the technology across a range of insurance operations," he said.

Meanwhile, the Digital Asset Basic Act — the legislation that would underpin a won-denominated stablecoin regime — has faced repeated delays to its legislative schedule. A key sticking point is the so-called "51 percent rule," which would restrict issuance to consortiums in which banks hold a majority stake, and the timing of the bill's introduction remains fluid.