Kakao Pay CEO calls for stablecoin rules to power AI payments

The need for AI payment rails

Kakao Pay CEO Shin Won-keun recently highlighted a significant hurdle for the future of artificial intelligence: how these agents will actually pay for things. He argued that for AI agents to become active participants in financial transactions, they require a reliable infrastructure that doesn't rely on human intervention. Currently, most payment systems are designed for people to enter card information manually, which creates a bottleneck for automated software.

Shin suggested that stablecoins are the most effective solution for this problem because they can handle small, frequent payments. He noted that existing card or bank systems often have fees that are too high to be practical for micro-transactions. For example, if an AI agent buys investment materials for a user, it might need to make repeated payments of only a few won to several dozen won.

By using stablecoins, these automated payments can occur without the need for separate card-information entry. This setup would allow AI agents to operate more smoothly across different platforms. Shin emphasized that the goal is to create a system where the AI can handle the logistics of payment while maintaining a clear connection to the user's finances.

How stablecoins facilitate automation

To illustrate how this technology works in practice, Shin pointed to the x402 payment protocol. This system allows an AI agent to pay for a service in stablecoins, and the service provider confirms the payment before they deliver the requested information. This creates a seamless loop where the AI acts as the primary transaction handler between two different digital entities.

Kakao Pay is actively involved in developing these standards by joining the x402 Foundation as the only founding member from South Korea. The company is working to establish global payment standards for overseas transactions and general commerce. This involves ensuring that the technology is verified and that the flow of money remains consistent across different borders and platforms.

The company is also conducting technology verification for a won-denominated stablecoin. They recently completed a proof of concept that integrated blockchain-based asset management into the Kakao Pay Money wallet. These tests are designed to see how digital assets can be managed securely within a familiar mobile payment environment for everyday users.

Partnerships and technical testing

Kakao Pay is not working on this technology in isolation but is building a network of partners to ensure the system is viable. They have been testing technology with KB Kookmin Bank specifically regarding the issuance and redemption of stablecoins. These tests also cover how these assets can be used for overseas payments, which is a key component of their long-term strategy.

The company is also expanding its reach by cooperating with international digital-asset firms like Circle and Fireblocks. These partnerships are intended to provide the technical backbone for a broader ecosystem of digital assets. By working with established global players, Kakao Pay aims to ensure their won-denominated stablecoin meets international standards for security and usability.

The objective of these collaborations is to move toward a system where tokenization and digital assets are standard. Shin stressed that institutional preparations for these technologies must move more quickly. The goal is to create a stable environment where businesses can confidently accept payments from AI agents without worrying about the underlying complexity of the blockchain.

Regulatory and security hurdles

Despite the technical progress, significant regulatory obstacles remain in South Korea. The Digital Asset Basic Act, which is necessary to introduce a won-denominated stablecoin, is still pending in the National Assembly. There are currently disagreements between financial authorities and the Bank of Korea regarding which entity should be allowed to issue these tokens.

These disagreements have left the timeline for commercializing a won-denominated stablecoin uncertain. Shin urged for faster rules to be established to provide a clear framework for security and liability. Without these rules, companies may be hesitant to deploy AI agents that have the power to move money, as the risk of unauthorized transactions remains a concern.

Shin suggested that regulations should be introduced in stages based on the specific role and risk level of the AI agent. For instance, an agent with limited permissions might require different oversight than one with broad financial authority. Establishing a liability framework is essential to define who is responsible if an accident occurs during an automated transaction. This clarity is required before AI agents can become mainstream participants in the economy.