10 South Korean Banks Launch Working-Level Talks With European Lenders on Stablecoin Remittances

Ten South Korean banks, including KB Kookmin Bank, Shinhan Bank and Woori Bank, have started working-level talks with European financial institutions on building a cross-border remittance system using stablecoins.

MoneyToday reported on September 9 that Jean-Luc Gustave, Asia-Pacific representative at Kyvallis, recently visited South Korea to discuss progress on the Pangea Project with local banks and blockchain infrastructure companies.

The Pangea Project is a proof-of-concept initiative led by Unica, a consortium of South Korean banks, and Kyvallis, a European banking group, to test a cross-border remittance model using stablecoins. Its core aim is to simplify the multiple intermediary steps required in conventional overseas transfers through the use of stablecoins.

In South Korea, 10 banks are participating, including KB Kookmin Bank, Shinhan Bank, Woori Bank, iM Bank, K Bank, Toss Bank, Gwangju Bank and Jeonbuk Bank. A recent working-level meeting brought together Kyvallis, SWIFT, Chainlink and most of the participating South Korean banks to share development updates and review the project's progress.

Pangea is also closely linked to banks' foreign-exchange business because it is studying a remittance model that would swap stablecoins pegged to different currencies. Among stablecoin-related projects involving South Korean financial institutions, it is one of the largest in terms of bank participation.

On the European side, a euro-based stablecoin is being pushed for launch within the year. Kyvallis has applied for the electronic money token, or EMT, license required to issue a joint euro-denominated stablecoin under the European Union's Markets in Crypto-Assets regulation, known as MiCA. A decision may come as early as September.

Kyvallis executives are scheduled to visit South Korea again later in September around Korea Blockchain Week, or KBW. Additional discussions are also expected with domestic banks and related institutions, including the Bank of Korea.

Still, issuing a won-denominated stablecoin in South Korea and linking it with Europe would first require legislation. Delays in discussions on the Digital Asset Basic Act, which would set issuance requirements for stablecoins and establish a supervisory framework for virtual assets, are limiting the buildout of a full commercial remittance service for now.

Financial authorities plan to accelerate related legislation in the second half, with the possibility of a lawmaker-initiated bill being discussed instead of government-sponsored legislation. The timing of the Digital Asset Basic Act and the regulatory framework for won-denominated stablecoins are emerging as key variables for whether the Pangea Project can be commercialized in South Korea.