K bank Chief Technology Officer Cha Dae-san (front, fourth from left), K bank’s digital asset task force lead Choi Jae-hyuk (back, fourth from left), as well as other officials of Project Pax, in Tokyo on Wednesday. (K bank)
The internet-only K bank said on Tuesday that it has completed the first phase of verification of “Project Pax,” a proof-of-concept project for overseas remittance technology utilizing stablecoins between South Korea and Japan.
The project brought together a consortium of institutions from both Korea and Japan, including K bank, Shinhan Bank, Nonghyup Bank, Fair Square Lab and Korea Digital Asset Custody on the Korean side, along with Shoko Chukin Bank and financial technology firms Programat and Datachain on the Japanese side.
The participating companies shared the results of their collaboration achievements during a project completion briefing held in Tokyo on Wednesday.
The verification process involved converting South Korean won into a stablecoin, transferring it via blockchain and reconverting it into Japanese yen.
The test demonstrated that stablecoin-based remittances can be executed faster and cheaper than traditional cross-border transfer measures.
In particular, the findings confirmed that stablecoins can enhance efficiency in interbank transactions, which account for a large share of foreign exchange activity.
The project also highlighted the potential for broader adoption, as its open application programming interface structure enables participation not only by banks, but also by nonbanking financial institutions and corporations.
Participating institutions examined regulatory and compliance requirements while focusing on API development for stable service integration.
The results confirmed that stablecoin-based transfers could be applied to existing banking systems without additional burden.
Project Pax will move into its second phase of testing, with goals that include real-time interoperability through linkage with the SWIFT network, adoption of payment-versus-payment systems to ensure simultaneous currency exchange and expansion into small-amount remittances.
“The first phase of the project has proven the efficiency and practicality of stablecoin-based overseas remittances,“ a K bank official commented.
“We will continue to lead digital asset-based innovation to provide faster and more efficient services to customers.“
andreahaneu@heraldcorp.com
AloJapan.com