GIWA Chain: A Layer 2 Blockchain for Global Finance
In a major development for blockchain in finance, Dunamu has signed a memorandum of understanding with Hana Financial Group and POSCO International. The goal is to build a real-time overseas remittance service on the GIWA Chain. This partnership aims to replace the older SWIFT network with a faster, blockchain-based system.
The core of this agreement is Dunamu’s Layer 2 blockchain, GIWA Chain. The three companies will connect this blockchain with Hana Financial Group’s foreign exchange network and POSCO International’s global supply chain. This integration allows real-world fund flows to be processed on-chain, bypassing traditional intermediaries.
Dunamu, which operates South Korea’s largest cryptocurrency exchange Upbit, designed GIWA Chain for high-volume, low-cost transactions. The blockchain uses an Ethereum-compatible architecture. This makes it easier for existing financial systems to adopt. By using this technology, the partnership seeks to reduce remittance times from days to seconds.
Replacing the SWIFT Network with Blockchain
The three companies plan to continue technical verification for moving from the SWIFT network to GIWA Chain. SWIFT, established in 1973, processes over 40 million messages daily. But it suffers from slow settlement times and high fees for cross-border payments.
Blockchain technology offers a transparent and near-instantaneous alternative. The GIWA Chain initiative targets international remittances. According to the World Bank, global remittance flows reached over $800 billion in 2023, with average fees above 6%. Blockchain-based systems can reduce these fees to under 1%.
The MOU outlines a phased approach. First, the partners will verify GIWA Chain’s ability to handle real-time gross settlement. This involves stress-testing for high throughput, security, and compliance with South Korean regulations. Second, a pilot service will launch, initially targeting POSCO International’s supply chain partners. POSCO International processes thousands of cross-border payments monthly. Using GIWA Chain, these payments can be settled in stablecoins or central bank digital currencies pegged to the Korean won.
Hana Financial Group’s Role
Hana Financial Group brings its foreign exchange network to the partnership. As one of South Korea’s largest financial holding companies, Hana operates branches in over 20 countries. Its expertise in currency conversion and regulatory compliance is critical.
The partnership also aims to establish financial infrastructure for efficient global fund management. This includes developing smart contracts that automate currency hedging and settlement. That can reduce operational risks for businesses.
Real-World Applications and Expert Views
The GIWA Chain initiative has immediate practical uses. For instance, POSCO International’s supply chain involves multiple currencies and jurisdictions. By using GIWA Chain, the company can settle invoices in real-time, improving cash flow and reducing reliance on bank intermediaries.
For individual remittances, the service could benefit millions of overseas Korean workers. According to the Bank of Korea, outward remittances from South Korea exceeded $20 billion in 2023. A blockchain-based system could save these workers hundreds of millions in fees annually.
Financial technology analyst Dr. Kim Soo-hyun from Seoul National University said the involvement of a major financial group and a global trading company validates blockchain’s utility beyond cryptocurrency speculation. However, challenges remain. Regulatory hurdles around anti-money laundering and know-your-customer compliance need careful navigation. The partners plan to work with South Korea’s Financial Services Commission to meet all legal requirements.
Timeline and Future Outlook
The MOU covers an initial 12-month period for technical verification and pilot testing. If successful, a commercial launch could follow in 2026. Industry estimates suggest the project will require significant capital.
This development aligns with global trends. Central banks worldwide, including the Bank of Korea, are exploring CBDCs for cross-border payments. The GIWA Chain could serve as a bridge between traditional finance and digital assets.
