On Tuesday, July 18, the South Korean Shinhan Bank announced the successful completion of the stablecoin proof-of-concept (PoC) pilot trial. The bank revealed that the pilot test involved using stablecoin in international payment.
The report demonstrated that the bank conducted the second pilot test for the stablecoin PoC in collaboration with fast-growing firms, including Siam Commercial Bank’s technology business unit (SCB TechX) and one of the largest financial institutions in Taiwan.
The joint effort enabled the bank to build the PoC on the Hedera open-source network. The team agreed to position the PoC on Hedera due to the efficiency and eco-friendly nature of the network.
Shinhan Bank Completes Stablecoin Remittance Pilot Test
The pilot test was conducted in phases. At the primary pilot testing of the PoC, the bank used South Korean won in real-time settlement. Subsequently, the project team experimented with foreign exchange rates integration with the currencies issued by the country’s apex bank, including the Thai Baht, the New Taiwan dollar, and the South Korean won on the Hedera platform.
Besides the test conducted on the Hedera network, the project team announced that the PoC was compatible with the Ethereum Virtual Machine (EVM). This implies that other EVM-powered stablecoins can use the PoC.
The bank confirmed that the completed PoC trials were continuation to the 2021 project. In the early stage of the PoC pilots, the Shinhan Bank collaborated with Standard Bank South Africa.
A revisit of the initial PoC work revealed that Shinhan minted South Korean won-backed stablecoins while its partner minted the stablecoin in the South African rand. At that time, the partners allowed the user to purchase the South Korean stablecoin and transfer it to Standard Bank’s account.
Steps Followed in Stablecoin Remittance Pilot Trials
In the second trial of the PoC, Shinhan worked with the Asian partners to improve the stablecoin’s efficiency and ease cross-border transactions. The team also explored ways to reduce the remittansce cost of the stablecoin.
In an interview with Shinhan Bank head of blockchain division Byunghee Kim, the executive was pleased that the project was completed successfully. He mentioned the distinctive features of the Hedera EVM technology, which will provide South Korean with endless benefits.
The executive mentioned the role of blockchain technology in cross-border payments. He acknowledged that stablecoin provides the fastest way to transfer value in cross-border trade at a low cost.
Kim stated that adopting blockchain technology has supported financial inclusivity and improved accessibility to financial services.
Beyond this, Kim explained that the Hedera technology will increase the speed of the remittance process and cut unnecessary costs. He affirmed that the PoC’s latest development would reduce third-party involvement in the business.