Hana Financial Group said on Thursday it has completed a proof of concept (PoC), jointly with Dunamu, for a foreign currency remittance service using blockchain technology.

The proof of concept replaced remittance messages previously exchanged via the existing SWIFT method between Hana Bank’s domestic and overseas branches with blockchain messages on Dunamu’s GIWA Chain blockchain network. It confirmed the possibility of reducing processing time and costs for foreign currency remittance transactions compared with the SWIFT method.

Hana Financial and Dunamu have also cooperated in anti-money laundering (AML) and know-your-customer (KYC) areas, which are essential verification elements for fund remittance transactions. They checked technical stability in internal controls and risk management needed for foreign exchange transactions.

The proof of concept is the first joint project pursued after Hana Financial and Dunamu signed a memorandum of understanding in December last year to jointly develop global financial services based on blockchain technology. The two companies have reviewed ways to apply blockchain technology to traditional financial services, including foreign exchange operations.

Hana Financial plans to push to build foreign currency remittance infrastructure using deposit tokens by the third quarter of this year based on the results. The structure issues deposit tokens based on funds deposited by customers and transfers them between remittance sending and receiving channels.

It plans to inspect the entire process of token issuance, delivery, payment and settlement, and test whether it can be applied to existing computer networks. It will then pursue commercialisation after steps including designation as an innovative financial service.

Eun-hyeong Lee (이은형), vice chairman of Hana Financial, said it was meaningful that Hana Financial and Dunamu produced results in a short period after signing the memorandum of understanding. He said Hana Financial will continue efforts to innovate traditional finance and provide greater value to customers through the introduction of technologies including digital assets.

Kyung-seok Oh (오경석), chief executive of Dunamu, said the proof of concept, which innovated the existing SWIFT system with the GIWA Chain, is a first step proving that blockchain can become a new standard for global financial infrastructure beyond being simply a technology. He said the company will continue challenges to lead a future financial ecosystem based on global Web3.