NongHyup Bank, a bank serving over 10 million customers, has partnered with Fireblocks to test VAT and GST refunds using blockchain technology, aiming to enhance transparency and security.
On November 14, NongHyup Bank (NH Bank), one of the largest banks in Korea, signed a Memorandum of Understanding (MoU) with digital asset platform Fireblocks to develop a tax refund prototype based on blockchain technology.
The pilot project will use the Fireblocks Tokenization Engine to process value-added tax (VAT) and goods and services tax (GST) refunds for in-store purchases. The collaboration is expected to be a breakthrough in simplifying the tax refund process while increasing transparency and security for both consumers and regulators.
The project will focus on asset tokenization, allowing for the assignment of unique digital identifiers to each transaction. This allows for tracking of the entire lifecycle of a transaction, from issuance to settlement, eliminating the risk of manual error and fraud.
According to Mr. Michael Shaulov, co-founder and CEO of Fireblocks, applying this technology not only helps reduce operating costs but also creates a safe and immutable storage system, thereby strengthening trust between banks and customers.
Source: Fireblocks Vision of the Future of Digital Tax Refunds
In Korea, VAT is applied at a rate of 10% on most goods and services. VAT refunds, especially for tourists, are often complicated and time-consuming. Refund fees can range from 3% to 6% of the product value. With the application of blockchain technology, the process is expected to become simpler, faster and more efficient. Customers can easily track the status of their refund, while banks can manage the process efficiently and transparently.
The collaboration between NH Bank and Fireblocks is not limited to the tax refund project. The two parties are also exploring other collaboration opportunities in the fields of digital assets and blockchain. NH Bank President Lee Seok-yong said that this MOU marks a significant step forward in the bank’s efforts to provide innovative blockchain-based services to its more than 10 million customers. This shows the growing interest of major banks in Korea in blockchain technology and its potential applications in the financial sector.
Fireblocks, with experience providing custody solutions and supporting blockchain projects, has successfully executed digital asset transactions worth over $6 trillion. Fireblocks' platform integrates wallets, custody systems, and trading partners on a single platform, making the transfer, storage, and issuance of digital assets secure and efficient.
Fireblocks has also recently expanded into new areas, including partnering with Coinbase International to offer derivatives and trading products to investors, as well as launching a Web3 toolkit for startups.