Written by Hazel J. Greene, Senior Analyst

Shinhan Bank, one of South Korea’s oldest financial institutions, recently announced the successful completion of a stablecoin remittance pilot on Hedera’s open-source public network. In collaboration with SCB TechX, an innovation unit of Siam Commercial Bank, Taiwan’s largest financial institution, and other financial companies, this trial marks an important step in exploring the potential of stablecoins for cross-border payments.

Shinhan Bank, alongside SCB TechX and other financial institutions, revealed the success of a proof-of-concept (PoC) test for stablecoin remittance payments. This pilot follows Shinhan Bank’s previous partnership with Standard Bank for stablecoin international remittances in 2021.

The PoC pilot conducted on Hedera’s distributed ledger technology (DLT) aimed to address key challenges faced in cross-border payments, including high fees, prolonged settlement times, and tracking issues. The trial successfully achieved real-time settlement and foreign exchange rate integration across the Thai Baht (THB), New Taiwan Dollar (NTD), and South Korean Won (SKW), as confirmed by Hedera in a media release.

Hedera claims that the PoC is compatible with the Ethereum Virtual Machine (EVM), allowing EVM-based stablecoin issuers like Circle and Tether to participate in subsequent trials using the same framework. This interoperability is a significant milestone for the stablecoin ecosystem.

Byung Hee Kim, Chief of Shinhan Bank’s Blockchain division, expressed the bank’s enthusiasm for exploring stablecoins as a means of facilitating faster, cheaper, and more accessible cross-border payments. The successful completion of this second PoC signifies a significant step forward for Shinhan Bank’s initiatives in the cryptocurrency industry.

The South Korean government has been actively formulating and implementing stricter regulations to regulate the crypto landscape following the industry’s turmoil in 2022. The latest move by the Financial Services Commission (FSC) introduces a bill requiring companies to disclose their crypto holdings, aimed at boosting transparency and investor confidence. This new rule is expected to come into effect from January 1, 2024.

With traditional financial institutions like Shinhan Bank increasingly embracing blockchain technology and introducing new solutions, the South Korean crypto industry is on a promising trajectory. The bank’s ongoing initiatives and partnerships reflect the ever-growing adoption of cryptocurrencies and demonstrate its commitment to driving innovation in the country’s financial sector.

Disclaimer: The information provided in this research report is for informational purposes only and should not be interpreted as financial or investment advice. The cryptocurrency market is highly volatile, and readers should conduct thorough research before making any investment decisions.