South Korea’s trade and finance are going to be on blockchain technology. According to a report Coindesk Korea and other Korean news outlets, the government targets it in 2021. The plan is to simplify the process of corporate evidence. They have to put documents submitted by trading companies to banks and others on private blockchains.
Accordingly, the government will improve the existing system as a new digital trade platform (uTH 2.0) by 2021. They have decided to use blockchain in the two areas of trade and finance. They will apply a number of technologies, including big data, to the platform.
How blockchain might improve trade finance in South Korea
Firstly, the electronification of trade companies’ documentary evidence on foreign investment in the form of foreign exchange transactions. Previously, companies have to submit contracts and other documentary evidence to banks when they engaged in foreign exchange transactions exceeding $5,000.
The government plans to improve this. So that companies can upload evidence documents to blockchain and share them with banks in real-time.
Secondly, the electronic purchase of export bonds. The plan is to raise the status of export bonds to the blockchain. Later, they have to share them with all banks to prevent possible double and excess purchases. This will help the market data to have a stable supply chain. From the perspective of companies, the effort to submit evidence documents directly to banks will also disappear.
In addition, the government will create a Digital Trade Blockchain Council starting as early as this month. It will involve banks, banking trade associations, and the Korea Trade Network (KTNet).
Deputy Prime Minister Hong Nam-ki stated:
“We will establish a digital trade platform that can be easily and conveniently used. The platform will be throughout export stages such as contracts, customs, and logistics.”
South Korea is one of the biggest markets of blockchain in the world. The cryptocurrency market in the country is also one of the biggest ones. It is home for the cryptocurrency exchange platform, Upbit. And it also has several cryptocurrencies including KLAY, Clink, etc.
Indeed, many have said that blockchain network is the future of trading.