Shinhan Financial Investment, a South Korean brokerage company, is planning to launch a peer-to-peer blockchain-based platform for stock lending services.
According to the local media platform Econews, the brokerage firm has tied with Directional, a financial services company, to develop the blockchain-based platform which will cut the need of any intermediary for stock lending.
Directional is one of the firms operating under the Financial Service Commission’s (FSC) sandbox program and is working to provide stock lending and borrowing services. This allows the company to work on innovative technologies with relaxation on the current regulatory frameworks.
Bringing blockchain to the mainstream
Shinhan Financial Investment is the arm of the country’s oldest bank, Shinhan Bank. The second-largest bank by asset in the country is also investing heavily on blockchain technology.
In May, the bank launched a blockchain-based platform to process loans, making the process efficient. The bank also implemented the decade-old technology last year in its day-to-day operation to minimize human errors. Media reports also revealed that the bank introduced blockchain-based rate swap transactions.
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South Korea is a hotbed for blockchain technology-based innovations by both large corporations and startups. The country is also one of the largest crypto markets with a massive public interest for digital assets. A report published earlier this year revealed that average South Korean crypto investor spent $6,000 on digital assets in 2018.
The banks, however, refrain from jumping into the crypto business and focus entirely on the development of decentralized technology (DLT).
Finance Magnates earlier reported that KB Kookmin Bank, the largest commercial bank in South Korea, signed an agreement with blockchain firm Atomrigs Lab which is working on the cryptocurrency security solutions.
Though not confirmed, media reports are suggesting that the bank is aiming to enter into the digital asset custodian business.
Many overseas crypto businesses are also flocking in the country to tap the market. Binance, the largest crypto exchange in terms of adjusted trade volume, is also planning to enter the market by opening a new branch in the country.