Shinhan Bank Completes Verification of Stablecoin-Based Overseas Remittance Technology

Expectations for Reduced Fees and Processing Time

[Asia Economy Reporter Jin-ho Kim] Shinhan Bank announced on the 30th that it has developed and completed verification of overseas remittance technology based on stablecoins.

Stablecoins are blockchain-based digital assets issued by private companies whose value is pegged 1:1 to fiat currencies such as the US dollar or Korean won, minimizing price volatility. A representative example is Tether, a coin created by the Hong Kong Bitfinex exchange to be linked to the US dollar. One Tether is designed to hold the value of one dollar.

Shinhan Bank judged that, as the use of stablecoins is increasing overseas?such as the issuance of JPM Coin by the major US bank JP Morgan?it is necessary to verify financial service technology using stablecoins for rapid market response, and chose overseas remittance services as the first technology verification.

Overseas remittance services proceed by the remitting bank preparing a foreign currency remittance message and delivering it to the receiving bank through an intermediary bank. Telegraphic transfer fees and intermediary bank fees of $20 occur, and it takes a minimum of 2 business days up to a maximum of 6 days.

On the other hand, overseas remittance based on stablecoins proceeds through direct transfers between banks, so there are no fees such as intermediary bank fees, and only blockchain network usage fees of less than 100 won per transaction occur. The remittance time is also close to real-time, at about 35 seconds.

In particular, overseas remittance based on stablecoins is noted not only for lower transaction costs and speed compared to existing overseas remittance but also for transparency and scalability.

Shinhan Bank recently completed verification through testing of overseas remittance technology based on stablecoins using blockchain technology and networks developed in collaboration with Hedera Hashgraph. The technology verification was conducted in a proof-of-concept environment where the remitting and receiving banks confirmed remittance details via Hedera Hashgraph and proceeded by issuing and burning won-based stablecoins.

A Shinhan Bank official said, “Although more review is needed for actual commercialization, based on this technology verification, we will accelerate providing customers with differentiated blockchain-based financial services in line with the vision of ‘Easier, More Comfortable, and Newer Finance.’”