South Korea’s Woori Bank has started the second round of Japan-Korea overseas remittance experiment built on Ripple. It is expected to complete on January 30 but will take at least 5-6 months more to become a policy.
2nd Round of Overseas Remittance Experiment
It has been reported in December that the Japanese financial institutions will experiment the second cross border transaction with the major banks of South Korea in 2018. These remittance experiments will be based on the blockchain technology of Ripple cryptocurrency, an American start up company.
In this second experiment, Woori Bank used the blockchain technology with 61 domestic banks and three major banks along with Japan post bank to conduct the overseas remittances and confirm if the transactions were conducted correctly.
An official from the Woori Bank said:
“We conducted the 2nd test of the overseas remittance on the afternoon of the previous day. We plan to finalize the test on the 31st after having a technical workshop on 25-26th.”
The existing international remittance system uses the SWIFT network and consists of an intermediary bank and a remittance and receiving bank as well. This system takes a lot of money and time for a commission fee.
The Blockchain technology will be used for multiple transactions and to verify those transactions history. It is expected that the technology will make the overseas payments much faster by making it available to the users the same day and will also help in reducing about 30% transaction cost. The reason being the distributed information technology allows both the parties to share the information in real time.
When will it come into action?
Though the test is completed, it will still take time for the bank to apply it to the overseas remittances. Woori Bank takes about five to six months to make a policy that is based on the evaluation of all the relevant departments as per the test results.
An official from the Woori bank said:
“After the test is over, we will hear the feedback from related departments such as technology and foreign exchange and make a final decision so that policy decisions will be made by the end of the first half of this year. It will be at the end of the year that blockchain technology is applied to overseas remittances because of the process.”
This test will be completed on January 31, 2018. It has been reported that being in the experiment stage, investors aren’t interested yet. Also, it is likely that one of the reasons for the rise in the value of ripple is the success of this experiment.
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I am an entrepreneur and a writer with a bachelors degree in Computer Science. I manage the blockchain technology and crypto coverages at Coingape. follow me on Twitter at @arya_achal or reach out to me at achal[at]coingape.com.