Korea’s Oldest Bank to Use Hedera Network for Testing KRW-Stablecoin in Cross-Border Remittances
Shinhan Bank, Korea’s oldest bank, has announced the completion of a proof-of-concept leveraging stablecoins and focused on international remittances.
The PoC is built on the Hedera Network, the enterprise-grade public ledger for the decentralized economy.
This partnership pushed the price of Hedera’s native token HBAR up 10% to $0.36. The $6.5 billion market cap coin is currently down 36.6% from its $0.569 ATH three months back. HBAR -9.73% Hedera / USD HBARUSD $ 0.20
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In its official announcement, Shinhan said it plans to mint South Korean Won (KRW)-backed stablecoins, and the partnering bank, Standard Bank in South Africa, will mint stablecoins backed by their local currency.
Users will be able to buy KRW-based stablecoin and send them to an account at the partner bank. The recipient will then receive funds in a locally denominated stablecoin and exchange it for the local currency.
The two banks will use the Hedera Consensus Service (HCS) to track and record transactions and confirm the foreign exchange rate at the time of each transaction.
Shinhan Bank, which serves 20 million customers and holds KRW 471.5 trillion ($396.6 bln) in assets, will be utilizing the Hedera Token Service (HTS) and Hedera Consensus Service (HCS) to test the issuance and distribution of stablecoins.
The idea is to remove the time-consuming process, which typically takes 3-7 days, involved in cross-border transactions and high intermediary bank costs that are borne by customers, an equivalent of $20-$80 on top of regular transfer fees. Mance Harmon, CEO, and co-founder of Hedera said,
“International remittances were a massive market of $702 billion in 2020, with $539 billion going to low- and middle-income countries.”
“There is a massive opportunity to cut out the middleman and make this process dramatically more efficient and cost-effective, getting the most money possible to people who often need it urgently.”
The Hedera network platform is governed by a council that includes Boeing, Chainlink Labs, Deutsche Telekom, FIS (WorldPay), Google, IBM, the Indian Institute of Technology (IIT), LG Electronics, Nomura Holdings, Standard Bank Group, Swirlds, Tata Communications, University College London (UCL), Wipro, and others.
Shinhan joined the Hedera Governing Council in April 2021. Before Hedera, earlier this year, Shinhan invested in Korea Digital Asset Custody (KDAC) and further completed a demonstration platform for central bank digital currencies (CBDCs) with LG CNS.