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The South Korean government is going to put all relevant documents on the blockchain making them available for banking institutions, trading institutions, and others.
A local news report in South Korea has recently confirmed that the Korean government is planning to move trade finance completely on a blockchain network in the next two years by 2021.
The announcement was made by the South Korean Trade Finance Minister Hong Nam-ki who introduced the developmental plan for digital trade on Monday, October 14. According to Nam-Ki, the South Korean government will apply the next-generation technologies like Big data, AI and blockchain. The government has plans to completely upgrade the entire Trade Finance ecosystem by 2021.
Getting trade finance activities on the blockchain means putting all relevant documents on the blockchain platform so that other financial institutions can easily access them. Similarly, export bonds will be available on the blockchain making them easily accessible to the banks. The Trade Finance minister said:
“We will build a digital trading platform that can be easily and conveniently used in all stages of export, such as contracts, customs and logistics.”
The Korean government will implement a Digital Trade Blockchain Council. The council will have members like trade associations, baking associations, banks, and the Korea Trade Network (KTNet). Besides, the document states that the goal behind this initiative is to promote blockchain-based foreign transactions.
The Korean government is likely to start the forex-based blockchain transactions soon by the end of 2019. This initiative will see participation from seven major banking institutions in South Korea.
HSBC’s Voltron Platform for Trade Finance
Earlier this year, it has been reported that banking giant HSBC is also looking to join hands with Korean banks for launching a blockchain trade finance platform. HSBC’s own blockchain-based commercial trade finance platform Voltron has managed to get several banking institutions from China onboard.
HSBC is one of the world’s largest trade finance banks and runs its Voltron platform on R3‘s Corda since HSBC is a member of the R3 blockchain consortium. Blockchain in trade finance is getting global attention due to its ability to securely store data.
“The biggest impact would be time. Time and transparency will help companies better manage their cash flow and working capital. I am here this week to reach out to Korean banks to collaborate on this blockchain platform for letters of credit,” said HSBC’s innovation director of distributed ledger Joshua Kroeker.