Cryptocurrency News

South Korean Shinhan Bank completes stablecoin remittance pilot with Asian partners

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South Korea’s Shinhan Bank has completed its second proof-of-concept using stablecoin for international remittances. Siam Commercial Bank’s SCB TechX unit and an unnamed Taiwanese financial institution also participated in the project.

The project carried out real-time settlement and foreign exchange integration with the banks’ national currencies on the Hedera network. The project was EVM-compatible, opening it up to use by a host of other stablecoins.

Shinhan Bank conducted its first proof-of-concept project in November 2021 in conjunction with South Africa’s Standard Bank, although that bank’s identity was also not immediately disclosed.

Shinhan Bank explained at the time that it minted a pool of South Korean won-backed stablecoins and the partnering bank minted stablecoin in its local currency. The user was able to buy Shinhan-minted stablecoins and send them to an account at the partnering bank. That bank provided the funds in the locally denominated stablecoin, which the user could then exchange.

Related: Crypto could eliminate 97% of traditional remittance fees: Coinbase

Byunghee Kim, head of the blockchain division at Shinhan Bank said, “We are pleased to have demonstrated how the use of Hedera’s EVM-compatible technology helps eliminate intermediaries, reduce costs, and speed up the remittance process.”

Remittances are noncommercial cross-border payments. They are typically slow, expensive and hard to track. An International Monetary Fund official stated earlier this year that remittance providers collect $45 billion in fees annually.

The use of stablecoin provides an alternative to central bank digital currency (CBDC) in Web3 remittance solutions. There are numerous CBDC cross-border payment projects, including some designed specifically for remittances, but few CBDCs have been launched, so that technology remains tentative. Meanwhile, stablecoin-based remittance solutions are becoming more common, especially in Latin America.

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