In a significant move toward modernizing cross-border payments, South Korea's Hana Financial Group, POSCO International, and Dunamu—the operator of the crypto exchange Upbit—have signed a trilateral memorandum of understanding (MoU) to launch a live blockchain-based remittance system. The agreement, signed Tuesday at Hana Financial Group's headquarters in Seoul, marks a critical step forward from the proof-of-concept (PoC) completed earlier this year. That earlier pilot, conducted by Hana and Dunamu, demonstrated that blockchain technology could dramatically reduce settlement times and costs compared to the traditional SWIFT framework.
The new MoU allows the system to be tested on real trade transactions for the first time, with POSCO International handling the actual fund flows. The three companies announced the development on Wednesday, emphasizing that the system is now moving from experimental stages to practical application. Under the terms of the agreement, POSCO International’s trading arm will manage business applications using real transaction flows. Hana Financial will take charge of remittance processing, fund settlement, and foreign exchange services. Meanwhile, Dunamu will provide the blockchain infrastructure through its proprietary GIWA Chain and maintain a secure, immutable transaction record.
Traditional cross-border payments rely on the SWIFT network, where sending the payment instruction and actually moving the money are two separate steps. This separation introduces delays and additional costs, often taking several days for funds to be credited. The blockchain system developed by Dunamu and Hana Financial combines both steps into a single real-time process, making transfers faster, cheaper, and more transparent. The GIWA Chain, designed specifically for financial applications, enables near-instant settlement while reducing the need for intermediaries.
The partnership highlights the growing interest in blockchain technology within South Korea's financial and industrial sectors. South Korea has long been a global leader in digital innovation, and the country's financial regulators have shown a cautious but progressive approach to blockchain and cryptocurrency adoption. The collaboration between a major financial group, a global trading company, and a leading cryptocurrency exchange operator underscores the maturity of blockchain solutions for real-world business applications.
Background and Significance of Blockchain Remittances
Blockchain-based remittances have been touted as a potential game-changer for international trade and personal transfers. The traditional SWIFT network, while reliable, suffers from high fees and slow processing times, especially for smaller transactions. By leveraging distributed ledger technology, companies can bypass correspondent banks and reduce the number of steps involved in a cross-border payment. This not only cuts costs but also improves transparency and security, as every transaction is recorded on an immutable ledger.
In South Korea, the push for blockchain remittances has gained momentum in recent years. Other financial institutions, such as Kbank, have partnered with Ripple to test similar systems. However, the Dunamu-Hana-POSCO initiative stands out because it involves a major trading company, POSCO International, which is part of the POSCO Group—one of the world's largest steelmakers. The involvement of a non-financial corporate entity in the pilot demonstrates the broader applicability of blockchain for trade finance and settlement.
POSCO International has been deepening its engagement with digital finance. The company recently issued blockchain-based foreign currency digital bonds worth approximately 140 billion won (about $95 million) with HSBC. It also launched a blockchain-based global payment system with JPMorgan last year. These moves indicate that POSCO International sees blockchain as a strategic tool to streamline its vast international operations, which span trading, energy, and resources.
Dunamu's GIWA Chain: Technical Foundation
Dunamu's GIWA Chain is a permissioned blockchain tailored for institutional use. Unlike public blockchains like Bitcoin or Ethereum, where anyone can participate, GIWA Chain restricts access to authorized parties—making it suitable for financial applications that require privacy and regulatory compliance. The chain is designed to handle high transaction volumes with low latency, which is essential for real-time gross settlement.
During the proof-of-concept phase, Dunamu and Hana Financial demonstrated that GIWA Chain could replace SWIFT's messaging network for cross-border transfers. The successful PoC showed that the blockchain could reduce settlement times from days to minutes, while also lowering costs by eliminating intermediaries. The system also provides a tamper-proof audit trail, which can help with compliance and anti-money laundering (AML) efforts.
Dunamu, best known for operating Upbit—one of the largest cryptocurrency exchanges in the world—has been diversifying its offerings. The company has invested heavily in blockchain research and development, and GIWA Chain is a product of that investment. By partnering with established financial and industrial players, Dunamu is positioning itself as a key infrastructure provider for the next generation of financial services.
“We have established a foundation for mid-to-long-term partnerships with leading domestic companies in the fields of digital finance and digital assets,” said Lee Gye-in, president of POSCO International, in a statement. The comment reflects the strategic importance of this collaboration, which may serve as a model for other companies looking to adopt blockchain for remittances and trade settlement.
Hana Financial Group's Role in Digital Innovation
Hana Financial Group is one of South Korea's largest financial conglomerates, with subsidiaries in banking, securities, and insurance. The group has been proactive in embracing digital transformation, including the development of blockchain-based services. The partnership with Dunamu and POSCO International aligns with Hana's broader strategy to leverage technology for operational efficiency and new revenue streams.
Hana Financial will handle the remittance processing, fund settlement, and foreign exchange aspects of the system. The group's extensive network and regulatory expertise ensure that the payments comply with South Korean and international laws. By integrating Dunamu's blockchain technology, Hana can offer its corporate clients faster and cheaper cross-border payment solutions, which is a significant competitive advantage.
The three companies plan to establish a working model for real-time blockchain remittances before the end of the year. This timeline suggests that the system could be rolled out more broadly in 2027, depending on the results of the live tests with POSCO International.
Implications for the Global Payments Industry
The live launch of this blockchain remittance system in South Korea has implications beyond the country's borders. If successful, it could encourage other financial institutions and corporations worldwide to adopt similar solutions. The inefficiencies of SWIFT have long been a pain point for global trade, and blockchain offers a viable alternative.
However, widespread adoption faces challenges. Regulatory uncertainty, interoperability between different blockchain networks, and the need for industry standards are all hurdles. Moreover, the transition from legacy systems like SWIFT will take time, as many banks and corporations have deeply integrated processes built around traditional infrastructure.
Nevertheless, the South Korean initiative demonstrates that blockchain remittances are not just theoretical—they are being implemented in real commercial environments. With strong backing from a leading financial group, a global trading company, and a top crypto exchange, the project has the resources and expertise to overcome obstacles.
As reported, South Korea's internet-only bank Kbank has also partnered with Ripple to test blockchain-based cross-border remittances, indicating that multiple players are exploring this space. The competition could accelerate innovation and drive down costs for end users. Furthermore, South Korea's government has shown support for digital asset and blockchain initiatives, including piloting tokenized deposits for government spending.
The collaboration between Dunamu, Hana Financial, and POSCO International is a landmark event in the evolution of cross-border payments. It showcases how traditional finance, emerging technology, and industrial enterprise can unite to create more efficient systems. The coming months will be crucial as the system processes live transactions, providing real-world data on performance and cost savings. If successful, this model could become a blueprint for other countries and industries seeking to modernize their payment infrastructures.
Source: Cointelegraph News