Toss, the financial services platform operated by South Korean fintech firm Viva Republica, has completed a proof of concept for a blockchain-based public payment infrastructure in partnership with the Korea Minting and Security Printing Corporation (KOMSCO), the state-run agency responsible for minting the country's coins and printing its banknotes and security documents. The project explored how digital currency could be incorporated into real-world payment and settlement.

Toss is one of South Korea's most widely used personal finance platforms, spanning payments, money transfers, and banking, which gives the pilot direct relevance to everyday consumer transactions. Viva Republica announced the completion of the project on Sept. 18. The initiative followed a strategic memorandum of understanding signed by the two organizations in April and examined whether blockchain-based digital currency could function as an additional payment and settlement method while remaining connected to existing public payment infrastructure.

End-to-End Payment Structure Tested

The proof of concept established an end-to-end payment structure in which users could convert blockchain-based digital currency into gift certificate tokens, pay with those tokens, and complete merchant settlement through a connected system.

To validate the model, the organizations built a test environment for local gift certificates that was isolated from actual commercial services. Within that environment, the project simulated the full transaction cycle, starting with users topping up gift certificate tokens using blockchain-based digital currency and running through payment processing and settlement to merchants.

The design was intended to examine how blockchain technology could operate alongside established payment infrastructure, rather than requiring the existing system to be replaced outright. That compatibility question sits at the center of tokenized-money experimentation worldwide, as governments and financial institutions — including central banks — test how digital currencies can connect to settlement systems already in daily use.

Optimism Served as the Blockchain Backbone

The blockchain infrastructure for the project was built on Optimism, an Ethereum layer-2 ecosystem. Layer-2 networks are designed to process transactions more efficiently by handling activity away from the Ethereum main network and subsequently recording transaction results on Ethereum.

Toss also verified a mechanism that connects blockchain-based digital currency transfer records with transaction information maintained within the existing payment infrastructure. This was intended to demonstrate how blockchain transaction data could be integrated into established payment processes.

Privacy was another focal point. Because public blockchains can potentially expose transaction-related information, the organizations tested a privacy feature known as Privacy Boost, which was applied to reduce the possibility that sensitive payment information could be externally exposed while transactions were processed through the blockchain infrastructure.

Merchant Settlement Flexibility in Focus

The proof of concept also incorporated payment processing and merchant settlement into a unified transaction flow. Merchants were given the ability to transfer settled funds according to their preferred timing rather than relying solely on a fixed settlement schedule.

If introduced into live services, the tested structure could help reduce processing times and lower costs associated with conventional payment and merchant settlement operations.

The project remains a proof of concept rather than a live public payment service, and any move toward live deployment would mark the next phase of a collaboration that began with April's memorandum of understanding. Its results nevertheless provide a technical basis for examining how blockchain-based digital currencies could be connected to public payment infrastructure while retaining existing systems and addressing privacy requirements.

A Toss representative said the company views stability and personal information protection as key requirements, given that public payment infrastructure supports services used in everyday transactions. The company also indicated that it would continue testing payment and settlement infrastructure aimed at reducing operational burdens for small-business owners.

Holiday Fee Support for Small Merchants

Separately, Toss is providing full subsidies for Toss Pay payment fees charged to small online merchants during the Sept. 21-27 Chuseok holiday period, one of South Korea's major traditional holidays and a peak season for gift-buying and consumer spending. The program applies to eligible payments made with Toss Pay Money or linked bank accounts at small online merchants.

Merchants do not need to submit a separate application, as the support is applied automatically. Fees incurred during the promotional period are scheduled to be refunded in early October, the company said.

The initiative marks Toss's second holiday fee-support program for small merchants, following a similar effort during the Lunar New Year.

The blockchain proof of concept and the merchant fee program address different areas of Toss's payment business. While the fee support offers near-term assistance to small online businesses, the blockchain initiative explores longer-term infrastructure that could connect digital currencies with established payment and settlement systems.

For users, merchants, and payment-system operators, the project points to a potential model for combining blockchain-based digital currency transfers with existing payment infrastructure while placing transaction privacy and settlement flexibility at the center of the design.