The South Korean body responsible for financial regulation in the country is encouraging the creation of a stock trading system with blockchain technology at its core. The Financial Supervisory Service or the FSS published a fresh study conducted by them, on 2nd August, and this publication was what brought their enthusiasm for blockchain to the attention of the industry. Reported first by local paper Korea JoongAng Daily, the study appeals to both firms and other regulatory agencies or authorities to partner with one another to create a system based on blockchain. The report has also presented an evaluation of the ways in which stock operators across the world make use of the blockchain technology to make their operations more efficient.
Blockchain use in the field of stock trading is not a new development. Back in 2016, the Australian Securities Exchange (ASX) had pioneered trials of the distributed ledger technology in the working of CHESS, its system for settlements and clearances. ASX has announced, thereafter, that it plans to start implementing the new system by 2020. The United States Stock Market, Nasdaq, had also launched a private securities platform powered by blockchain last year. The London Stock Exchange attempted to make use of blockchain to begin to substitute paper trading certificates in 2017 as well. Japan Exchange Group (JPX) established a consortium to evaluate the possibility of implementing blockchain solutions in capital markets infrastructure in the same year.
According to the study, the blockchain application in Korean stock trading system is at a nascent stage and for it to grow in the coming days, a strong partnership between private and public sectors would be not just necessary but imperative. The FSS stated that the private and public companies must overcome any existing barriers in order to work together on developing blockchain application since that would greatly benefit the system.
Use of blockchain is being increasingly adopted in various sectors, especially in industries such as this which require speedy, secure and cost-effective transactions to be made. Since the blockchain technology allows us to create immutable and easily traceable records and cuts cost while boosting speed as well as efficiency, there can be no doubt that this technology is the future of most of our existing industries. Industries requiring management of transactions, supply chains or security are many in number and they are increasingly turning to blockchain to make their work easier.