KOSCOM and Five Major Korean Firms to Launch a Blockchain for “Unlisted Company Securities”
- KOSCOM blockchain integrates ‘unlisted shares’ mostly from small and medium sized companies.
- The blockchain – a collaboration of six major Korean companies – is set to be launched by the end of the year.
Six Korea companies in the fintech industry will collaborate to launch the country’s first blockchain to integrate unlisted shares. The companies involved in building the blockchain are Koscom – the primary head of the operation – Hana Financial Investment, KEB Hana Bank, Daejeon Technopark, Amicus Lex and the Korea Accelerator Program.
The ‘Koscom Blockchain’ is set to improve the overall trading of shares not listed on the big stock market exchanges. According to a local Korean media outlet, Chosun Ilbo, Koscom blockchain is set to be released before the end of the year offering the smallest of non-listed companies an opportunity to issue their securities on the wider market – safely, quickly and efficiently.
Korea’s ‘Unlisted Shares Problem’
Small and medium sized companies do not issue their physical securities on the exchanges much like the top companies. Stocks in small companies are a trading ‘blind spot’ in Korea given the costs associated with the securities value chain.
Most of these companies’ securities are traded over the counter, with humans taking messages over the phone while accepting trading offers and recording the results on paper or a spreadsheet. This is definitely a slow, ineffective and erroneous method to conduct securities trading.
The Koscom blockchain will offer companies not large enough to afford listing on the Kospi main board, the Kosdaq secondary board or the Korea New Exchange (Konex) a platform to issue their securities. The blockchain is set to offer a wider market an opportunity to trade the unlisted securities while reducing the cost of listing to a minimum.
In mid-July, major South Korean firms including Samsung, KOSCOM, SK Telecom, KT, LG UPlus and KEB Hana Bank announced a collaboration to build a mobile ID system on a blockchain.