South Korea’s Shinhan Bank and Hedera Hashgraph (HBAR) have completed a concept test for international money transfers using coins stacked on the Hedera network.
Shinhan Bank’s new proof of concept for money transfer in South Korea can send money internationally in seconds for a fraction of a cent on the Hedera network.
Hedera claims that the average transaction fee per transaction on the network is $0.0001 and the average transaction time is 3-5 seconds, a significant improvement over what is currently available for traditional money transfers.
In an announcement dated November 29, Hedera said the goal is to see if stack coins can be issued and distributed for financial use cases with lower fees and shorter delivery times than current systems, and to make transactions traceable.
Hedera Hashgraph is a very secure Public Distributed Ledger Network (DLT). A proof of concept, which is proof of the feasibility of a particular method or idea, uses the Hedera Token Service (HTS) and the Hedera Compatibility Service (HCS).
Shinhan Bank plans to mint coins backed by the Korean won (KRW), while international partner banks participating in the pilot program will issue coins stacked with the local currency. Bank customers who receive KRW stack coins will be able to exchange them for local currency stack coins that can be exchanged for local paper currency.
Reducing international transfer fees is a convenient use of blocks. The average cost of sending $200 across borders through traditional banks in the fourth quarter of 2020 was 6.51% ($13.02), according to the December 2020 Global Remittance Rates Report. The average is expected to drop to 3% ( $6) by 2030.
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“This is a great opportunity to get rid of middlemen and make the process more efficient and cost-effective, while generating as much money as possible for people who often need it most urgently,” said Mannes Harmon, CEO and co-founder of Hedera.
Shinhan Bank has been on the Board of Directors of Hedera since April 2021. Since July 2021, it has also served on the Kline Blockchain Governance Board.
According to CoinGecko, Hedera’s token, HBAR, has responded aggressively to the news of a 10% increase in the past 12 hours.