Wednesday, Sep 28, 2022
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Standard and Shinhan bank to test cross-border stablecoins

Shinhan-Bank-Standard-Bank-partnership-IFM-image
Both the banks will use the decentralised public ledger Hedera Hashgraph, a blockchain technology

Shinhan Bank in South Korea and Standard Bank in South Africa are all set to test the use of cross-border stablecoins – a form of crypto currency by using the decentralised public ledger Hedera Hashgraph, according toto media reports.

Both banks are set to issue new stablecoins that adhere to their respective national currencies and will allow users purchase the stablecoins for international payments with users of the other bank.

With the help of the Hedera Token Service (HTS) and Hedera Consensus Service (HCS), both the banks plan on testing the issuance and distribution of stablecoins, especially in cases that suffer from high fees, longer waits and absence of tracking feature.

Going by the current financial systems, people or organisations who want to send cross-border payments have to pay high intermediate bank costs and cross-border payments between countries are also lacking liquidity and a direct network. As a result, customers typically pay the equivalent of an extra $20-$80 along with a cross-border transaction fee.

Additionally, it takes three to seven business days to complete and customers can’t track their transfers during the process. Once the stablecoin solution is developed by the banks, both individuals and organisations can send and receive funds in a locally denominated stablecoin by paying a minimum fee.

Shinhan Bank released a statement to the media, saying, “Joining the Hedera Governing Council this spring has allowed us to significantly accelerate our engagement with other global industry leaders to leverage the power of Hedera’s fast, fair, green public distributed ledger. Cost-effective, efficient international remittance is the perfect, real-world financial use case to build on a network that provides Hedera’s speed and low cost.”

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