South Korea's government is betting big on blockchain becoming the core architecture of the country's financial services platform

South Korea’s Financial Services Commission (FSC), the country’s primary financial regulator, announced yesterday that it will launch a pilot project for blockchain-based financial services this year.

The FSC has not yet revealed too many details about the project. But according to local media reports, the government plans to make blockchain technology the core architecture of the country’s financial services platform.

The news comes just after the first blockchain consortium in South Korea was announced last month. The consortium, which consists of 21 financial investment companies and five blockchain technology companies, has signed a memorandum of understanding (MoU) to serve as a think tank for the Korean capital market to develop distributed ledger solutions.

The blockchain alliance was founded by the FSC and the Korea Financial Investment Association (FIA). FSC Vice Chairman Jeong Eun-bo said:

The Korean Blockchain Alliance plans to collaborate on a pilot project this year.

The establishment of this blockchain alliance proves the South Korean government's firm determination to develop the country's financial technology sector. The South Korean government plans to allocate 3 trillion won (US$2.65 billion) to fund the development of domestic startups and related enterprises. It can be seen that the government has made up its mind to develop technology and plans to make South Korea a financial technology center in Asia. Singapore and China are the leading forces in the development and popularization of blockchain in East Asia, and South Korea will become their strong competitor.

Jeong believes that the current "blockchain reform" is equivalent to the "Internet reform" in the 1990s.

Blockchain has great potential in finance and other fields. Korea is at the forefront of the world in the development of information and communication technology (ICT). Therefore, if the government, related industries and experts can work together and pool their wisdom, Korea will surely lead the international development trend in the blockchain field.

Bitcoin regulation is coming soon

The wave of financial technology in South Korea has also put the country's Bitcoin regulatory plan on the agenda in 2017. Seeing the gradual popularity of Bitcoin in South Korea, the FSC formed a digital currency working group at the end of last year to provide regulatory solutions and issue relevant licenses for Bitcoin exchanges.

FSC Chairman Yim Jong-yong spoke at the time on the regulation of digital currencies:

The government will promote the comprehensive institutionalization of digital currency, keep pace with global trends, and ensure that it is in line with the development of the United States, Japan and other countries.

In order to promote the development of Bitcoin and blockchain, Shinhan Bank, a large financial institution in South Korea, has opened a Bitcoin remittance channel between South Korea and China. In addition, as the only stock exchange in South Korea, the Korea Exchange (KRX) has launched a blockchain trading platform similar to Nasdaq Linq, allowing startups to trade stocks on the open market.