Shinhan Bank, one of South Korea’s oldest banks, announced the successful completion of a stablecoin remittance test on the Hedera open-source public network. The trial was conducted in collaboration with Siam Commercial Bank’s Technology Innovation Business Unit (SCB TechX), Taiwan’s largest financial institution, and other financial companies.
Shinhan Bank Completes Second Stablecoin Pilot
On Tuesday, financial institutions including Shinhan Bank and SCB TechX revealed that a proof-of-concept (PoC) test of stablecoin remittance payments was successful. The trial is a follow-up effort of Shinhan Bank following its first collaboration with Standard Bank on stablecoin international remittances in 2021.
The PoC pilot, conducted using Hedera’s distributed ledger technology (DLT), aims to address cross-border payment issues such as high fees, extended settlement times and tracking problems.
According to Hedera Media, the trial enabled real-time settlement and foreign exchange (FX) rate integration for the Thai baht (THB), New Taiwan dollar (NTD) and South Korean won (SKW).
Furthermore, Hedera claims that the PoC is compatible with the Ethereum Virtual Machine (EVM). This means that EVM-based stablecoin issuers such as Circle and Tether can participate in subsequent pilots using the same framework.
Byung Hee Kim, head of Shinhan Bank’s blockchain division, said the bank welcomed the opportunity to explore the potential of stablecoins as a means of cross-border payments.
He added: “The successful completion of this second PoC marks a significant step forward in our efforts to make cross-border payments faster, cheaper and more accessible to people around the world.”
Shinhan Bank continues to lean into the cryptocurrency industry with modern blockchain initiatives and solutions. Back in 2019, the Seoul-based bank partnered with two fintech firms to build a blockchain-based security solution.
The South Korean cryptocurrency industry looks set to continue its ascent as traditional financial (TradFi) institutions such as Shinhan Bank further adopt blockchain technology and launch new solutions in 2023.
South Korea takes clear stance on cryptocurrency industry
Following the 2022 cryptocurrency industry crash, the South Korean government has been developing and issuing stricter rules to regulate the country’s cryptocurrency landscape.
In the latest move, South Korea’s Financial Services Commission (FSC) has issued a new bill requiring all companies that issue or hold crypto assets to disclose their holdings. The new regulation is expected to take effect on January 1, 2024.
The scope of reported virtual assets includes interchangeable tokens based on DLT and similar cryptographic technologies, or tokens issued using cryptography. The committee said this mandatory public disclosure is a measure to increase transparency and investor confidence in South Korea's cryptocurrency sector.