South Korea’s Shinhan Bank in hands with local blockchain remittance startup Streami Inc. will start an overseas digital money transfer service from next month, becoming the first Korean financial institution to launch such a service transacting bitcoin abroad.
The bank will first start the Bitcoin remittance service between Korea and China through an intermediary country Hong Kong where digital currency transaction is legally allowed and plans to expand its service to other countries starting next year.
Currently, the Bitcoin is not a legal means of payment in Korea, but the country’s financial authorities last month announced a plan to institutionalize digital currencies by next year. Until the digital currency transaction becomes legal, Shinhan Bank will transfer money to a Bitcoin exchange in Hong Kong and resend the bitcoins to Chinese Bitcoin exchange where the digital money will be converted into the local currency.
Digital currency refers to virtual payment method that exists only in electronic form. The virtual money with finite supply is traded in blockchains where all participants share information on financial transactions rather than having a centralized ledger managed by a reputable intermediary such as a central bank for verification. Bitcoin and Ethereum that were created in 2009 and 2014, respectively, are ones of the most well-known digital currencies.
Streami is a Seoul-based blockchain remittance startup that won supports from the fintech startup incubation program Shinhan Future’s Lab. Shinhan Bank had invested 500 million won ($437,637) in Streami through direct stock purchase.
By Chung Ji-sung
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