South Korea's KB Kookmin Bank is developing a blockchain solution for international remittances with the aim of ushering in "safer and faster" foreign exchange services.
For the initiative, the commercial bank said it is partnering with local bitcoin startup Coinplug to utilise patents the firm holds in the field.
In statements, KB Kookmin Bank explained that banks currently send overseas remittances via the SWIFT network, which sends payments through an intermediary before they arrive at the beneficiary institution.
However, utilising blockchain technology avoids the intermediary, and could reduce costs and result in possible savings for the customer, the bank said.
A bank spokesperson remarked:
KB Kookmin Bank is the largest subsidiary of KP Financial group, which according to KB's 2014 annual report, it earned KRW 1.4tn ($1.16bn) in revenue from more than 30 million customers, an amount it estimates is more than half the population of Korea.
In the same announcement, Kookmin also announced plans to develop an "overseas fund transfer and data storage service" that can be used for verification when opening online bank accounts.
This new offering will also be based on distributed ledger technology, the bank said.
According to the company, the move follows a shift in stance by Korea's Financial Service Committee that has enabled online verification to be used for this purpose, a new policy it said aims to promote online financial services and encourage financial start-ups.
Korea image via Shutterstock
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.