Korean Regulators Suggest Blockchain for Stock Market
The South Korean financial technology sector continues to grow, due in no small part to the prevalence of cryptocurrency trading and blockchain tech which is always developing and innovating within the country’s unique economic ecosystem. But despite the country’s disposition to the unique new market, the community of fintech enthusiasts still faces the strict hand of regulation as an enemy to unbridled progress.
For South Korea, the main regulatory authority is the Financial Supervisory Service, or the FSS. Now, the organization has taken a concerted step towards making blockchain technology a mainstream aspect of the growing stock trading sector within South Korea. Regulators are suggesting that local agencies set to regulate the stock market begin to consider the development of blockchain systems to facilitate stock transactions and trades moving forward.
The agency’s suggestion isn’t a particularly new one. Regulators within the United States, the United Kingdom, and even in Australia have considered the integration of similarly advanced public ledger systems for their own stock markets. But for South Korea, this innovation could well be the very thing that puts the country over the edge, helping them to establish the government as a new power of blockchain technology and stock movements in the 21st century.
Benefits of the Blockchain
Blockchain technology allots several important advantages to organizations which facilitate the trading of securities, stocks, and other common financial assets. Namely, the study by these Korean regulators found that the systems had marked increases to the efficiency and security of the trading system. This primarily happens as a result of the efficiency of the protocol for storing, tracking, and remembering transactions.
The blockchain has always been revered for its ability to store information in an entirely immutable fashion. Because info cannot be erased from the blockchain under any circumstance, it represents the perfect way for stock systems to store their information. Blockchain technology can also be used to increase the speed at which transactions occur, as well as minimize the amount of unnecessary costs associated with the usage of arbitration services.
Finally, the blockchain technology which continues to revolutionize the fintech sector can be used to circumvent many instances of corruption, abuse, and unfairness within the traditional system of transaction arbitration in the stock sector of any economy. The blockchain is decentralized, meaning that it often does not fall under the distinct control of any one organization.
The South Korean regulator did not simply theorize on the importance of blockchain technology for no reason. During a comprehensive study, the organization looked to empirical statistics and historical examples in order to justify their decision—and their recommendation.
Specifically, the regulator cited the use of blockchain record keeping within the United States’ NASDAQ as a successful implementation of the technology. Additionally, they studied the London Stock Exchange Group for their usage of a blockchain-powered private share issuance platform. In both instances, the authority concluded that the blockchain was incredibly effective at storing and transmitting public transaction information.
Though this regulator did recognize the infancy of the blockchain technology within Korea, it urged local regulators to attempt to integrate the tech into current systems in order to increase the overall efficiency of the stock trade.