Catenaa, Tuesday, November 18, 2025-One of South Korea’s biggest banks has begun a pilot that tests stablecoin-based value-added tax refunds for foreign visitors.

NH NongHyup Bank said the proof-of-concept aims to digitize the refund system and trial real-time settlement using blockchain.

The bank is working with Avalanche, Fireblocks, Mastercard and Worldpay.

The project uses Avalanche to test automated VAT refund recording through smart contracts. It will also examine whether stablecoin settlement can remove delays and simplify currency exchange. The pilot does not involve real money or personal data.

NH NongHyup said the model is intended to cut paperwork and support rising tourist arrivals. South Korea recorded more than 16 million inbound visitors last year.

The bank said the trial could improve convenience for travelers and help local retailers handle refund processing more efficiently.

The initiative tests a digital system that records refund data at the point of purchase and stores it on blockchain. It also tests a settlement process that relies on stablecoins to move funds instantly.

NH NongHyup said it plans to expand its work in this area as financial regulators complete new rules for stablecoins. South Korea is developing a framework that supports stablecoins tied to the won as it seeks to strengthen monetary sovereignty. Lawmakers and regulators continue to debate which entities should issue these tokens.

The Bank of Korea says only banks should be allowed to issue them, while private firms argue broader participation would encourage innovation.

NH NongHyup Bank is testing stablecoin-driven VAT refunds for tourists on Avalanche as South Korea advances its stablecoin plans.