South Korea and foreign financial markets are applying blockchain technology one after the other. It is likely that blockchain industry, which is faced with criticisms about absence of proper demonstration projects, will be applied to many financial markets in 2019.
Besides South Korea’s financial market, foreign banks and major card issuers have also started demonstration blockchain projects.
KEB Hana Bank has started ‘Global Payment Hub’, which is based on blockchain technology.
It is looking to create a blockchain-based platform that allows global players such as banks and settlement businesses to settle and wire transfer without boundaries through ‘digital asset network platform (Global Loyalty Network)’. Assets such as e-money, point, coupon, and mileage that can be digitalized will be subjected to this platform.
KEB Hana Bank’s platform will store every transaction from deposit and withdrawal of money from bank accounts and electronic wallets to wire transfer and settlement into blockchain ledgers. In the future, it is going to establish an ecosystem that will allow real-time settlement between countries by settling such functions through electronic currencies.
“GLN supports standardized and periodical settlement methods through blockchain technology.” said Director Kim Kyung-ho of KEB Hana Bank’s Global Digital Center. “We will be able to mutually connect global digital assets through GLN platform”
Shinhan Bank has started a demonstration project to apply blockchain technology to every one of its task.
It selected departments that can be applied with blockchain technology with its blockchain lab at the center and it has established a process where selected departments had gone through education and consulting and have applied blockchain technology to their tasks.
First, Shinhan Bank applied blockchain technology to ‘IRS (Interest Rate Swap) transaction’ process.
It has introduced Smart Contract to transactions involving interest rate derivatives to block off any discrepancy in information that can occur during a transaction process. “Based on our success in applying blockchain technology to IRS transaction, there will be more opportunities in the future when we apply blockchain technology to other areas.”
BNK Busan Bank is going to push for PoC (Proof of Concept) that converges Quorum, which is Ethereum-based private blockchain developed by JP Morgan and EthLab, to various services.
Its plan is to converge Quorum with SSO (Single Sign-On) and private certification. It is also planning to introduce blockchain technology to electronic signature, loyalty program, foreign remittance, and digital asset management.
Woori Bank is planning to introduce wire transfer service based on Ripple’s platform sometime early next year. It finished demonstrating international wire transfer service and it is currently testing it with 60 Japanese banks through Ripple’s network.
Major global banks are even more active in applying blockchain technology to their tasks.
BBVA, a major bank in Spain, introduced a loan evaluation system based on blockchain last year. By doing so, it was able to drastically reduce loan evaluation process that used to take many days into just couple hours. It also provides transparent loan evaluation process by recording every loan process including information from its customers into blockchain. It is currently pushing for a pilot project for wire transfer between Spain and Mexico. Wire transfer that used to take 4 days previously now takes only couple seconds through Ripple’s platform.
Banco Santander has carried out blockchain-related research for more than 5 years and is working on applying various blockchain platforms to various banking services. RBS Group from Britain succeeded in automating a process that creates mortgage payment receipts based on blockchain platform.
It is confirmed that MasterCard registered for 60 patents related to blockchain such as instant payment system through distributed ledger technology. It has basically prepared itself to carry out every business network through blockchain. It is planning to introduce relevant systems step by step depending on users’ experience. Visa Card is preparing blockchain-based real-time international settlement system that will allow foreign remittance between companies through ‘Visa B2B Connect’.
“More than 90% of banks have invested into blockchain this year.” said Professor Lee Won-bu of Dongguk University. “Many banks will start to commercialize their blockchain projects in 2019.”
Staff Reporter Gil, Jaeshik | osolgil@etnews.com