South Korea To Build A Digital Trading Platform On Blockchain; Reducing Cost By 90%
A local press report has revealed that trade finance within South Korea will be heading to the blockchain. According to Korea, this transition could be completed as early as 2021. However, they plan to roll it out in a matter of months for the South Korean foreign exchange.
While many people associate blockchain with cryptocurrency, it’s really just a sophisticated method of storing data. South Korea will use this in trade finance to store relevant documents to ensure digital security. Export bonds will be used in the same way to hinder duplication issues.
These are all essential elements of the country’s new Development Plan for Digital Trade. This new plan was introduced on October 14th by Hong Nam-ki, Finance Minister of South Korea. Blockchain, along with new-age technologies like AI and 5G, will be used to completely reconstruct South Korea’s trade environment.
Hong stated that Korea would build a digital trading platform that’s both easy and convenient to use. This ease of use will stretch out across all stages of export, such as customs, logistics, and contracts.
At the writing of this article, a so-called Digital Trade Blockchain Council is planning to be assembled. This Council will have members stretching from banks, trade and banking associations, and the Korea Trade Network (KTNet). KTNet specializes in the automation of trade processes, so it’s a natural fit.
There’s also mention of a far more short-term goal for the country’s initiative. They plan on promoting blockchain-based forex transactions and set the target for it to start in December 2019. The initiative plans on bringing seven banks together to establish the service.
Another aspect of this Development Plan is the utilization of blockchains for the u-Trade-Hub 2.0 (uHT 2.0) initiative. This initiative will use the blockchain technology to bring together information across various subjects. Things like exports, foreign investment, and international projects will be made available to companies with an eye on overseas expansion.
A Growing Trend
Blockchain technology is slowly, but surely, being seen for what it is: One of the most secure ways to store data. Global parties interested in trade finance have come to notice this little tidbit, and have taken steps to incorporate it. Voltron makes use of it and brought together some of the world’s most prominent financial institutions to enable it. China Construction bank claims to have already started processing via blockchain on a large scale. UBS took we.trade live a few months prior.
There will eventually come a point where blockchain technology is a common way to store data, maybe even the so-called “standard” of any business. We will have to see to find out, but the blockchain is doubtlessly a useful technology.