One of Korea’s biggest financial institutions, Shinhan Bank, recently announced that they will be providing bitcoin remittance services for the Korea-China corridor starting in December. The development marks the first time that any major bank has announced a Bitcoin value transfer system.
Seoul based Shinhan has over 8,531 employees at 723 branches, and assets of over 285 trillion Korean won, or US$251 billion, spread across 140 overseas networks in 19 countries around the world. The bank has won numerous awards in the Asian banking sector, including last year’s Best retail bank.
The new remittance service is powered by Streami, a self proclaimed, “Blockchain remittance middleware and infra provider for financial service providers.” Streami moves value between countries by sending bitcoin between approved partners, which saves customers time and money as bitcoin can be sent within a few minutes with fees that are orders of magnitude smaller than those charged by incumbent remittance networks.
Streami CEO, Junhaeng Lee, launched the company last year to specifically target the Korean-Chinese remittance corridor, but the Harvard-educated, former McKinsey consultant told BNC that the company is already working on other corridors with licensed partners.
The startup won an incubator program early in 2015, run by Shinhan’s Future Lab, which lead to the bank investing 500 million Korean won (US$437,637) in the startup through a direct stock purchase. Lee and his team secured a further US$2 million in seed funding last December. Investors include Shinhan Bank, Shinhan Data Systems, ICB, Bluepoint Partners, the Digital Currency Group and Fenbushi Capital.
“At the moment we are only handling the volume ‘out of’ Shinhan Bank. We plan to expand into the ‘inbound’ ASAP but it will take some time given the bank pace in system integration & compliance approvals.”
- Junhaeng Lee, Streami CEO
It would be hard to find a country with better access to bitcoins than South Korea. On top of several popular bitcoin exchanges, residents enjoy a network of over 17,000 ATM machines and 24,000 convenience stores where they can buy bitcoins in person.
The Korean government seems to have noticed all of the bitcoin activity as well, having recently announced that they will be issuing their own blockchain-based digital currency in the next few years.
However, the currency regulations in Korea have to change before any digital currency is a legal means of payment, and the Financial Services Commission recently announced a plan to institutionalize digital currencies by 2017.
Until digital currency transactions become fully legal, Streami will be transferring money to one of the Bitcoin exchanges in Hong Kong, which will forward bitcoins to a participating Chinese Bitcoin exchange that converts it to local currency for the recipient.
“We are not dependent on one or two exchanges. We are using many regulated exchange for on-ramping.”
With such great access to purchasing bitcoins, and so many Filipino workers there remitting their earnings back to the Philippines, Korea has become a major hub for bitcoin remittances. Payphil, and Hyphen, and Coinplug, are all Korean bitcoin remittance competitors that are doing steady business sending money over the Philippines to Korea corridor. Each has its’ own set of countries that they offer services for, and all will be competitors of Shinhan’s remittance service when it arrives in December.
Meanwhile, Bloom Solutions, Rebit, and Sentbe are Filipino startups doing the same from their end, sending and receiving money from Korea. In September it was claimed that over 20 percent of the entire Korean to Philippines corridor is already using some form of bitcoin remittance service.