South Korean banking titan, Shinhan Bank, has successfully completed a feasibility test for stablecoin remittances on Hedera’s network, reportedly realising instantaneous, real-time settlement and foreign exchange rate integration. The test results caught notable attention as it incorporated three diverse currencies: the Thai Baht, New Taiwan dollar and South Korean won.
Shinhan’s proof-of-concept (PoC) facilitates synergy with the Ethereum Virtual Machine, primarily docking onto Hedera’s smart contract features. This flexibility allows any EVM-based stablecoin issuers to utilise this system, unfolding possibilities for cross-currency transactions with reduced complexities and costs.
This landmark moves answers to the burgeoning need to address the high intermediary bank charges in current financial structures, especially while dealing with cross-border transfers and markets lacking liquidity. Asides the pricey transaction fees, clients also had to navigate an opaque transaction process with turnaround time ranging between 3-7 days.
Kim Byunghee, Chief of Blockchain division at Shinhan Bank reiterated that the major banking institution is leveraging Hedera’s EVM-compatible technology in its drive to create a more efficient, cost-effective, and swift remittance procedure.
Financial institutions and banking establishments are thus, recognising the potency of Hedera’s stablecoin solution to revolutionise cross-border funds transfer. This technique enables individuals and organisations to send and receive money in locally denominated stablecoin at impressively low charges.
Interestingly, SCB TechX CEO, Trirat Suwanprateeb, opines that since these assets offer a quicker, cheaper, and more reliable avenue for cross-border funds transfer, this could be a stepping stone towards enhancing financial inclusion in less serviced communities.
The quest to harness the vast possibilities of blockchain and distributed ledger technology (DLT) in cross-border payments has been gaining steam. Earlier in 2021, Shinhan entered a partnership with American crypto custodian, BitGo, and Korea Digital Asset Trust, a move aimed at developing secure crypto custody solutions.
Pushing the blockchain narrative further, Shinhan, in collaboration with LG CNS a few months ago, revealed a pilot platform for central bank digital currencies. Going on to break more ground, the bank, first in the country’s history, gave crypto account services to a corporate client. This move signified major strides in the recognition and utilisation of cryptocurrency in mainstream financial structures, an otherwise tumultuous journey.
While this represents a leap towards the envisaged blockchain future, it is important to consider the challenges that lie ahead such as scaling, interoperability, and regulatory hurdles, which could potentially slow the pace at which this innovation is accepted on a wider scale.
Source: Cryptonews
