Chainlink and Over 10 Korean lenders Push to Kill FX Delays With Real-Time Settlement

What Project Pangea Is

The initiative brings unneurotic 3 superior partners: Fairsquarelab, described arsenic a first-mover successful halfway integer plus infrastructure successful South Korea; UniKA (Unified Korea Alliance), a steering committee of 5 entities including Shinhan Bank, JB Bank, Kbank, Fairsquarelab, and OBDIA, backed by much than 10 participating Korean commercialized banks; and Qivalis, a euro stablecoin consortium powered by 37 starring European banks.

The combined radical represents implicit $10 trillion successful assets nether management.

The Problem They Are Solving

The planetary FX marketplace processes much than $9.6 trillion successful regular trading volume. Despite that scale, cross-border transactions inactive beryllium connected intermediary currency conversions that hold colony by 2 concern days nether the existent T+2 standard.

Project Pangea aims to destruct that hold by enabling direct, atomic Payment-versus-Payment (PvP) swaps of EUR and KRW stablecoins. The attack uses ISO 20022 messaging standards and existing Swift infrastructure, meaning participating banks bash not request to regenerate their existent systems to join.

How the Technology Works

The architecture runs crossed 3 layers.

At the banking layer, Swift and ISO 20022 messaging grip institution-to-institution communications. At the connectivity layer, Chainlink’s Cross-Chain Interoperability Protocol (CCIP) moves EUR stablecoins from their autochthonal networks to the KRW colony chain, portion Chainlink Data Streams provender real-time FX marketplace information into a Proactive Market Maker engine.

At the colony layer, Fairsquarelab’s Pangea L1 Network, a settlement-dedicated blockchain operating independently of immoderate azygous participating state oregon bank, executes atomic FX swaps connected Ethereum, Polygon, and the Pangea L1.

A cardinal plan diagnostic of the Pangea L1: oracle information updates are guaranteed to execute up of each different transaction successful a block, truthful each FX swaps settee against the existent marketplace terms alternatively than a stale rate.

What the Participants Said

Fernando Vazquez, President of Capital Markets astatine Chainlink Labs, described the announcement arsenic a measurement toward rebuilding however planetary worth moves. “Project Pangea upgrades the fragmented overseas speech exemplary of contiguous with direct, atomic currency swaps utilizing stablecoins,” Vazquez remarked.

The Chainlink Labs enforcement added:

“This is simply a wide illustration of however the Chainlink modular powers global-scale colony for the adjacent procreation of superior markets.”

Joonhong Kim, CEO of Fairsquarelab, framed the inaugural successful presumption of Korean marketplace access. “For Korea, Project Pangea is much than an ratio gain, it opens a way for the Korean won to link much straight with planetary currency markets, reducing reliance connected intermediary currencies,” Kim said.

Why It Matters

Settlement hazard is simply a persistent outgo successful planetary FX. During the two-day model betwixt commercialized execution and T+2 settlement, some counterparties transportation vulnerability to the other’s default. Atomic PvP colony closes that model entirely: some legs of a currency swap either implicit simultaneously oregon neither does.

For Korean banks specifically, the existent exemplary requires converting won into a large intermediary currency, often the U.S. dollar, earlier converting into the people currency. Direct EUR-KRW atomic swaps would chopped that measurement out.

Chainlink besides noted that wrong its ecosystem, endeavor gross and work usage fees are programmatically converted to LINK tokens and stored successful the Chainlink Reserve, a strategical onchain reserve designed to enactment semipermanent web sustainability.

Next Steps

Project Pangea is structured arsenic a moving radical alternatively than a finished product. The task unit volition measure the modulation way from T+2 toward T+0 and physique retired the multi-currency colony web crossed the participating institutions. No nationalist timeline for afloat deployment has been announced.