Today Hedera and Korea’s Shinhan Bank announced plans for a Proof of Concept to use stablecoins for international remittances on the Hedera Hashgraph distributed ledger network. While neither announced the involvement of Standard Bank, the participation of the South African bank was revealed in a planned Youtube event on the topic next week. Both banks joined Hedera’s Governing Council earlier this year.
Cross border payments have known challenges in terms of the high costs for small remittances and delays. Shinhan intends to mint Korean Won coins that a bank account holder could conceivably send to South Africa, where they can be exchanged for Standard Bank issued South African Rand coins. The Korean bank estimates that the cost of a remittance would be less than 100 won or US 8.4 cents and the transaction would be complete in around 35 seconds, with traceability enabled by Hedera’s DLT.
A key motivation was to trial the technology in response to other banks, particularly JP Morgan’s JPM Coin. However, according to Shinhan, this experiment does not include a linkage with its core banking systems which would be essential to use the technology in a live environment. Hence it stated a live service would require additional research.
Shinhan Bank’s interest in digital currency is not new. In the run-up to Korean central bank digital currency (CBDC) trials, the bank partnered with LG CNS on a digital currency platform in anticipation of a future Korean CBDC.
The bank also joined the governing council of Korea’s Klaytn blockchain, which like Hedera, is also a public permissioned network. The founder of Klaytn, Kakao subsidiary GroundX was selected for South Korea’s CBDC simulation.
Last October, Shinhan invested in digital asset custody platform KDAC, which was co-founded by digital asset exchange Korbit, blockchain company Blocko, and research firm Fair Square Lab. In Korea, most large organizations are involved in one of several decentralized identity solutions, and Shinhan is no exception, participating in the MyID Alliance.