Shinhan Bank of South Korea Successfully Concludes Stablecoin Remittance Pilot in Collaboration with Asian Partners

South Korean Shinhan Bank Completes Stablecoin Remittance Pilot with Asian Partners

South Korea’s Shinhan Bank has successfully completed its second proof-of-concept utilizing stablecoins for international remittances. The project involved the participation of Siam Commercial Bank’s SCB TechX unit and an undisclosed Taiwanese financial institution.

The project implemented real-time settlement and foreign exchange integration using the Hedera network and was compatible with the Ethereum Virtual Machine (EVM), allowing for potential utilization with various other stablecoins.

Shinhan Bank initially conducted its first proof-of-concept project in November 2021 in collaboration with Standard Bank of South Africa, although the specific identity of the partnering bank was not disclosed.

During the initial project, Shinhan Bank created a reserve of stablecoins backed by South Korean won, while the partnering bank minted stablecoins using its local currency. Users had the ability to purchase Shinhan-minted stablecoins and transfer them to an account at the partner bank. The partner bank then provided funds in the locally denominated stablecoin, which users could subsequently exchange.

Byunghee Kim, the head of the blockchain division at Shinhan Bank, expressed satisfaction with the outcome, stating, “We are pleased to have demonstrated how the use of Hedera’s EVM-compatible technology helps eliminate intermediaries, reduce costs, and expedite the remittance process.”

Remittance Challenges and the Role of Stablecoins

Remittances, which refer to noncommercial cross-border payments, are often slow, costly, and difficult to track. According to an International Monetary Fund official, remittance providers collect $45 billion in fees annually.

Stablecoins offer an alternative to central bank digital currencies (CBDCs) in Web3 remittance solutions. While there are several CBDC cross-border payment projects, including those specifically designed for remittances, the launch of actual CBDCs remains limited. In contrast, stablecoin-based remittance solutions are becoming increasingly prevalent, particularly in Latin America.