South Korean heavyweight lender Shinhan Bank has completed a proof-of-concept rollout of a stablecoin project for international remittances in partnership with South Africa’s Standard Bank, using Hedera Hashgraph.
Fast facts
- The project’s aim is to test the issuance and distribution of stablecoins for international remittances, which often frustrate senders and receivers due to their high fees, long delays and lack of tracking features.
- Shinhan Bank will mint Korean won-backed stablecoins that users will be able to purchase before sending to Standard Bank users who will exchange them for South African rand, and vice versa.
- Hedera Hashgraph is an enterprise-grade public blockchain network on which applications run in a decentralized economy. Both banks will use the Hedera Token Service, which enables the minting of coins, and the Hedera Consensus Service trust layer to track and record transactions and confirm foreign exchange rates at the time each transaction takes place.
- Shinhan Bank said in a press release: “Cost-effective, efficient international remittance[s are] the perfect real-world financial use case to build on a network that provides Hedera’s speed and low cost. We are excited to work with a leading global banking partner to deliver the first of what we hope will be many solutions that drive the next generation of finance and financial inclusion.”
- Earlier this year, the bank invested in Korea Digital Asset Custody, an industry consortium providing digital asset custody services. In March, Shinhan partnered with LG CNS to complete a pilot program for central bank digital currencies. It is also currently operating under an agreement with South Korean crypto exchange Korbit to provide bank deposit accounts for exchange users under their real names.
- As of 2020, there were 19,065 African nationals and more than 2 million non-Koreans overall residing in South Korea who may benefit from the development of international remittances involving stablecoins.