(MENAFN- CoinXposure)
Shinhan bank of south korea has completed its second stablecoin international remittance proof-of-concept (PoC).
SCB TechX of Siam Commercial Bank and an unnamed Taiwanese financial institution also participated in the initiative.
On the Hedera network, the initiative implemented real-time settlement and foreign exchange integration with the banks' national currencies.
The initiative was compatible with the Ethereum Virtual Machine (EVM), allowing numerous other stablecoins to utilize it.
Shinhan Bank conducted its first proof-of-concept initiative with South Africa's Standard Bank in November 2021, although the identity of the other bank was not immediately disclosed.
Shinhan Bank explained then that it issued a pool of stablecoins secured by South Korean won, while the partnering bank issued a stablecoin in its local currency.
A user could purchase stablecoins minted by Shinhan and transfer them to an account at the partner bank.
This bank provided stablecoins denominated in the local currency, which the user could exchange.
Shinhan Bank's head of the blockchain division, Byunghee Kim, stated,“We are pleased to have demonstrated how the use of Hedera's EVM-compatible technology helps eliminate intermediaries, reduce costs, and speed up the remittance process.”
Remittances are noncommercial international transfers.
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They are typically slow, costly, and challenging to monitor.
An official of the International Monetary Fund stated earlier this year that remittance providers collect annual fees of $45 billion.
In Web3 remittance solutions, stablecoins offer an alternative to central bank digital currency (CBDC).
There are numerous cbdc cross-border payment projects, some designed expressly for remittances, but few CBDCs have been implemented, so the technology is still in its infancy.
In the meantime, stablecoin-based remittance solutions are gaining popularity , particularly in Latin America.