Shinhan Bank Completes Second Stablecoin Pilot for International Remittances
– Shinhan Bank, in collaboration with SCB TechX and an unnamed Taiwanese financial institution, has completed its second proof-of-concept project using stablecoins for international remittances.
– The project utilized the Hedera network for real-time settlement and foreign exchange integration with the banks’ national currencies.
– The project was compatible with the Ethereum Virtual Machine (EVM), allowing for potential use with other stablecoins.
– This is Shinhan Bank’s second stablecoin pilot, following a previous project with South Africa’s Standard Bank.
Stablecoins as an Alternative to CBDCs in Remittance Solutions
– Remittances, which are noncommercial cross-border payments, are typically slow, expensive, and difficult to track.
– The use of stablecoins offers an alternative to central bank digital currency (CBDC) in Web3 remittance solutions.
– While there are various CBDC cross-border payment projects, few CBDCs have been launched, making stablecoin-based remittance solutions more common, particularly in Latin America.
– According to an International Monetary Fund official, remittance providers collect $45 billion in fees annually.
Hot Take: Shinhan Bank Paves the Way for Efficient International Remittances
Shinhan Bank’s successful completion of its second stablecoin pilot for international remittances is a significant step towards improving the efficiency and cost-effectiveness of cross-border payments. By utilizing the Hedera network and EVM-compatible technology, the project eliminates intermediaries, reduces costs, and speeds up the remittance process. This development highlights the growing importance of stablecoins as a viable alternative to CBDCs in remittance solutions, offering a more accessible and practical option for individuals sending money internationally. As the adoption of stablecoin-based remittance solutions continues to rise, the traditional remittance industry may face disruption, ultimately benefiting consumers with lower fees and faster transactions.