Shinhan Bank and Hedera Hashgraph (HBAR) of South Korea have created a proof of concept for international remittances utilizing stablecoins on the Hedera Network.
On the Hedera Network, a new proof of concept from South Korea’s Shinhan Bank for remittances can move money abroad in seconds for a fraction of a penny.
Hedera says that their network’s typical transaction price is $0.0001 and transaction time is 3-5 seconds, both of which are huge increases above what is presently accessible via conventional remittances.
Hedera announced in a Nov. 29 release that it wants to see whether it’s feasible to create and distribute stablecoins for financial use cases with cheaper costs and faster completion times than current systems, all while keeping transactions traceable.
Hedera Hashgraph is a high-security public Distributed Ledger Technology (DLT) network based on proof-of-stake. The Hedera Token Service (HTS) and Hedera Consensus Service are used in the proof of concept, evidence that a technique or idea is feasible (HCS).
Shinhan Bank intends to produce stablecoins backed by the Korean Won (KRW), while overseas partner banks participating in the trial would issue stablecoins in local currency. Bank customers will be able to swap KRW stablecoins for local currency stablecoins, which may then be exchanged for local fiat currency.
A good use case for blockchains is lowering costs on international transfers. According to Remittance Prices Worldwide’s December 2020 report, the global average cost of transferring $200 across national boundaries using conventional banks was 6.51 percent ($13.02) in Q4 2020. By 2030, the average is predicted to drop to 3% ($6).
There is a huge opportunity to cut out the intermediary and make this process dramatically more streamlined and cost-effective, delivering the most money possible to individuals who most need it, Hedera CEO and Co-founder Mance Harmon stated.
Since April 2021, Shinhan Bank has joined Hedera Governance Council. In addition, since July 2021, it has also been a member of Klaytn’s blockchain governance council.
As per CoinGecko, Hedera’s native token HBAR has gained 10% in the last 12 hours due to the announcement.