After internal verification of the non-fungible token (NFT) technology, South Korea’s Shinhan Bank is considering commercialization and joining the biggest trend in crypto since the year began. It’s also getting involved in the digital asset market, looking at the launch of won-based stablecoins.
On Thursday, November 4th, Ha-ri Yoon, the head of Shinhan Bank’s cell division, spoke at the ‘NFT BUSAN 2021’ event hosted at BEXCO’s 2nd Exhibition Hall in Busan. Yoon reportedly said, “The legal issues regarding NFTs are huge from the perspective of financial companies. He added, “The president of Shinhan Bank is promoting related projects with interest to the extent that he wrote a book review on NFT-related books.”
Further details were announced on Thursday, including plans to fully launch into the digital space. In addition, in collaboration with worldwide corporations, Shinhan Bank, the largest South Korean bank based on assets, is also experimenting with the issuance of won-based stablecoins. There are stablecoins like Tether (USDT) that are one-to-one tied to the dollar, but as of now, no won-based stablecoins have been released yet.
According to Yoon, “We are testing the issue of won-based stablecoins based on the Hedera Hashgraph public blockchain and using them for overseas remittances.”
Shinhan Bank joined the Hedera Hashgraph Board of Directors earlier this year in April, and its Bank’s won-based stablecoin would be the first of its kind in the world. The bank’s won-based stablecoin will be available by the end of this month, thanks to the Hedera Hashgraph public blockchain. There is still a lot to be sorted out before the stablecoin is sold since it is in the testing phase, and legal concerns are being sorted out.
What are Stablecoins?
A cryptocurrency with a constant value is known as a stablecoin. This means that, unlike other crypto assets, the value of the coin should not vary regularly. Although the US dollar is frequently related to this fixed price range, other currencies are tied to various price indexes. Specific Stablecoins are aiming to be pegged to the consumer price index or equivalent indices of some countries as they prepare to enter the market. Because Stablecoins can theoretically be fixed to nearly anything, there are Stablecoins tied to a variety of fiat coins and even precious metals like gold and silver.
How the latch is managed and what the entire system is founded on is the deciding element for Stablecoins. This means that the big question for stablecoins is how the organizer ensures the stability of the coin’s value.
Tether, for example, requires a custodian to manage the currency and then reserve a particular amount of collateral. Tether keeps the US dollar in a bank account, and the quantity held must be equal to the amount issued in order for the system to function properly. Price swings are avoided in this method. Other stable decentralized cryptocurrencies, such as Dai, achieve this goal without the need for a central authority. To manage the collateral and preserve order, they use smart contracts on the Ethereum blockchain.
South Korea’s Shinhan Bank quest for a stablecoin is good news for the crypto community. This move will further advance the adoption of crypto in Asian countries.