Shinhan Bank completes stablecoin trial to explore new cross-border payment solutions

Compile: Blockchain Knight

One of South Korea’s oldest banks, Shinhan Bank, announced the successful completion of a stablecoin remittance proof-of-concept (PoC) pilot on the Hedera open source public network.

This test was carried out by Shinhan Bank in cooperation with SCB TechX (Siam Commercial Bank Technology Innovation Business Unit), Taiwan's largest financial institution and other financial companies. Another breakthrough after an initial partnership in stablecoin international remittances.

This PoC pilot was executed using Hedera’s Distributed Ledger Technology (DLT) and aimed at solving cross-border payment issues such as high fees, long settlement times, etc.

According to Hedera, the trial enabled real-time settlement and real-time foreign exchange rate integration between Thai Baht (THB), New Taiwan Dollar (NTD) and South Korean Won (KRW).

Additionally, Hedera claims that the PoC is compatible with the Ethereum Virtual Machine (EVM), which means EVM-based stablecoin issuers such as Circle and Tether can use the framework to participate in the future.

Byung Hee Kim, head of Shinhan Bank’s blockchain division, said the bank welcomes the opportunity to explore the potential of stablecoins as a means of cross-border payments.

He also added, “The successful completion of this PoC marks an important step in our efforts to make cross-border payments faster, cheaper, and more accessible to people around the world.”

In the future, Shinhan Bank will continue to lean toward the Crypto industry and launch modern blockchain innovations and solutions. Back in 2019, the Seoul-based bank partnered with two fintech firms to build a blockchain-based security solution.

With traditional financial (TradFi) institutions such as Shinhan Bank further adopting blockchain technology and launching new solutions in 2023, the South Korean crypto industry looks set to continue to rise.

Following the collapse of the crypto industry in 2022, the South Korean government has been formulating and issuing stricter rules to regulate the crypto market in the country.

In its latest move, South Korea’s Financial Services Commission (FSC) has released a new bill requiring all companies that issue or hold crypto assets to disclose their holdings, a new regulation expected to begin on January 1, 2024 take effect.

The scope of virtual assets that need to be declared includes alternative tokens based on DLT and similar encryption technologies, or tokens issued using encryption technologies.

According to the committee, Such mandatory public disclosure is a measure to increase transparency and investor confidence in the South Korean crypto space.