Decentralized oracle network Chainlink has joined a consortium of European and South Korean banks to develop a blockchain-based foreign exchange settlement network. The consortium, comprising multiple commercial banks from both regions, aims to explore the use of regulated digital currencies to simplify cross-border payment processes.
Under the project plan, participants will conduct in-depth research on issuing stablecoins pegged to the euro and the South Korean won within existing regulatory frameworks. They will evaluate whether these stablecoins can enable real-time foreign exchange settlement between banks, potentially replacing the traditional correspondent banking model. Chainlink will provide its oracle infrastructure to ensure secure and reliable data exchange between the blockchain system and legacy banking backends, guaranteeing transparency and immutability throughout the stablecoin issuance, transaction, and settlement lifecycle.
If the research yields positive results, regulated euro and won stablecoins could become standardized tools for cross-border FX settlement, significantly reducing settlement latency and counterparty risk. This collaboration further reflects the growing adoption of blockchain infrastructure by traditional banking systems, setting a precedent for future stablecoin-based cross-border applications for other fiat currencies.