One of the oldest banks in South Korea, Shinhan Bank, has revealed it will launch a cryptocurrency remittance service using Bitcoin. A joint effort between the bank and Streami Inc. will oversee the cross-border service between Korea and China.
Shinhan Bank and Streami Plan to Launch South Korean Bitcoin Remittance Platform
Blockchain remittance could save significant costs and ensure complete transparency for the customer. Moreover, the network is more secure than traditional incumbent remittance services. Streami explained that blockchain is an open data network that can efficiently deliver value across borders. The digital ledger remittance startup also has support from Shinhan bank’s IT subsidiary Shinhan Data Systems.
Streami’s Alternate Plan Before Government Legalization
The two organizations hope to launch the blockchain service this December. However, Bitcoin is not considered legal tender within Korean borders. Shinhan Bank and Streami expect the authorities to legalize and regulate cryptocurrencies in 2017. Until then, the service will use Hong Kong as an intermediary for its blockchain-based currency conversion.
Shinhan Bank will leverage its already established clientele and capital stock of KRW 25.0 billion to assist the project. The bank already committed ₩500m (roughly $427,000) to the Streami project last year.
Streami and Shinhan Bank believe South Korea is a fertile landscape for blockchain-based remittance. Korea has over 800,000 foreign workers. With just foreign workers alone, Korean remittance services processed 840,000 transactions (4.4 billion USD) per annum.
Competitors and Expansion Plans
South Korea has been a growing hub for financial technology startups and legacy institutions. Shinhan Bank hopes its remittance platform can produce favorable results. However, there are a number of other Bitcoin-related cross-border startups competing in the region. The Korean-based Korbit has offered low-cost remittances with cryptocurrency for quite some time.
Korbit’s Hyphen project allows payouts between 24 countries and charges a 1% fee per blockchain transfer. The company also has backing from Softbank Ventures Korea, Pantera Capital, and the Digital Currency Group, raising $3.5 USD million in equity.
Shinhan Bank and Streami’s remittance service will be the first platform backed by a legacy financial institution with deep roots in Korea. The application plans to be fully compliant with anti-money laundering (AML) controls. Additionally, it will implement fraud detection, sanction screening, and regulatory reporting. After solidifying the company’s foundations, the Seoul-based startup Steami will expand across Asia targeting Thailand, Singapore, and the Philippines.
What do you think about Shinhan Bank and Streami’s plan for blockchain remittance in South Korea? Let us know in the comments below.
Images courtesy of Shutterstock, Shinhan Bank, and Streami Websites.
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