South Korea's first blockchain alliance was established, and the government will allocate $2.65 billion to support financial technology

Yesterday, 21 financial investment firms and five blockchain technology companies announced that they had signed a memorandum of understanding (MoU) to form a blockchain consortium to develop distributed ledger solutions.

The blockchain alliance is led by the Korea Financial Investment Association and involves many financial institutions and financial technology (Fintech) companies to form a blockchain think tank for the Korean capital market.

According to Business Korea, the IT committee of the Korea Financial Investment Association will share their blockchain case studies and technical findings with members of the new alliance.

According to reports, Park Sun-moo, general manager of NH Investment & Securities, one of South Korea’s largest securities firms, said:

“This alliance represents the first time that multiple financial companies in South Korea have joined forces to utilize blockchain technology. This will help realize the fundamental value of blockchain and maximize the convenience, security, and efficiency of financial transactions.”

The alliance’s development roadmap includes:

1. Investigate and research blockchain projects and work, and establish a personal authentication blockchain solution in 2017;

2. Automated clearing and settlement in 2018-2019;

3. OTC blockchain transactions will be realized in 2020.

Last month, South Korea’s Financial Services Commission (FSC) hinted for the first time that it wanted to establish a blockchain alliance, a government + private alliance initiated by the market to focus on innovative applications of Bitcoin’s underlying technology in South Korean society and industry.

Intensify the promotion of Bitcoin, blockchain and financial technology projects

Not wanting to be left behind by China, Singapore, and Japan in the Asian financial technology race, South Korea has evidently begun efforts to develop a more inclusive and technology-oriented market for Bitcoin and blockchain projects, and financial technology projects more broadly.

As the demand for Bitcoin grows every day, South Korea has set up a task force to introduce Bitcoin regulation in 2017. Yim Jong-yong, chairman of the Financial Services Commission of South Korea, recently said:

“Referring to global trends in the United States, Japan and other countries, the South Korean government will fully promote the systematization of digital currency.”

The government also announced a total allocation of 3 trillion won (about US$2.65 billion) as financial support for the development of the country's financial technology industry over the next three years.

One notable private banking venture effort is that Shinhan Bank, a large South Korean banking group, will introduce a Bitcoin remittance service between South Korea and China.

The Korea Exchange recently launched a blockchain platform that startups can use to trade stocks on the open market.

At the same time, the South Korean government has also reached cooperation with Singapore and Indonesia to jointly commit to financial technology research and development.

South Korea’s first blockchain alliance follows similar public-private collaborations in blockchain in other countries, such as the Japan Stock Exchange Blockchain Alliance and the Russian Private Bank Blockchain Alliance.