Shinhan Bank, based in South Korea, has successfully concluded a feasibility test centered on stablecoin remittance payments. The test utilized Hedera’s distributed ledger technology, with the primary objective of addressing the challenges associated with cross-border payments. These challenges primarily include exorbitant fees, extended settlement durations, and the absence of tracking capabilities. Collaborating with SCB TechX, the technology innovation unit of Siam Commercial Bank, as well as other financial institutions, Shinhan Bank embarked on this pilot project.
Byunghee Kim, the leader of blockchain at Shinhan Bank, emphasized the potential of stablecoins to revolutionize the transfer of value across borders. He noted that stablecoins provide a low-cost, rapid, and dependable means of facilitating such transactions. This, in turn, has the potential to enhance financial inclusion and grant improved access to financial services for individuals and businesses residing in underserved communities.
The stablecoin remittance pilot conducted by Shinhan Bank is compatible with the Ethereum Virtual Machine (EVM) by leveraging Hedera’s smart contract capabilities. Hedera further expressed that stablecoin issuers utilizing the EVM can participate in forthcoming pilots utilizing the same tested framework.
Byunghee Kim expressed satisfaction with the progress, emphasizing the advantages of Hedera’s EVM-compatible technology in eliminating intermediaries, reducing costs, and expediting the remittance process.
Shinhan Bank’s Stablecoin Solution
According to the World Bank, the average cost of remittances stands at 6%. Transfers between countries with limited liquidity and network connections often attract substantial intermediary fees. Moreover, these transactions typically take between three to seven days to process, offering customers no visibility into the progress of their transactions.
Shinhan Bank asserts that its stablecoin solution presents individuals and organizations with the opportunity to send and receive funds in a local digital asset denomination, all at significantly lower fees compared to traditional remittance processes. Byunghee Kim stressed the importance of this successful completion, viewing it as a significant stride towards achieving faster, more affordable, and more accessible cross-border payments for people worldwide.