Hyundai completes first stablecoin transfer on Avalanche

Hyundai Motor, South Korea’s largest automaker, is the first major Korean company to use blockchain for international payments between its own branches. The company is completing a proof of concept in which $20.000 worth of USDT is transferred via the Avalanche network from its US entity to its Mexican subsidiary. While traditional banking channels take three to four hours, the transaction is now completed in approximately seven minutes.

The pilot is being carried out by Hyundai Card, the financial arm of the group. According to the press release from Hyundai Card, it is not a purely technical test but a full-fledged business payment process that takes into account legal and financial regulations in both countries. In addition to Hyundai Card, Tether as the issuer of the stablecoin USDT, Avalanche as the blockchain infrastructure, and payment company Axiym are involved in the execution.

From dollars to USDT and back

The operation of the pilot is relatively simple: the US entity of Hyundai Motor converts dollars into USDT, sends it via the Avalanche network to the Mexican branch, which then converts the stablecoin back into local currency. The entire process takes an average of seven minutes from start to finish. That is a striking difference compared to traditional bank transfers, which typically take at least three hours.

Hyundai Card states that the infrastructure is thoroughly tested in advance for potential problems in the payment process. The parties involved map out regulations concerning accounting, taxation, law, and internal procedures before the payment takes place. According to the company, this makes the approach suitable for broad business use, not just for technology companies or fintechs that have been experimenting with stablecoins for some time.

Expansion to Europe with Circle and Visa

After the successful completion of the US-Mexico pilot, Hyundai plans to roll out the approach further. Later this month, a second pilot will start targeting European subsidiaries, this time in cooperation with Circle and Visa. Circle, known as the issuer of USDC, recently received approval from the OCC for a national trust bank in the US, which further strengthens its position in institutional payments.

Hyundai indicates that it ultimately wants to add more countries and local currencies to the system. The focus is on simplifying cross-border payments within its own group. With the current USDT price of $1.00, the currency risk during the transfer remains minimal, making the stablecoin particularly suitable for this type of internal treasury transactions.