South Korea will transfer trade finance to blockchain by 2021

According to local media, the South Korean government plans to transfer trade finance to blockchain over the next two years.

The transition will be completed by 2021, and operations with foreign currency will begin to be carried out using the blockchain for several months. With regard to trade finance, relevant documents will be posted on the blockchain so that financial institutions can access them. Export mortgages will also be available on the blockchain so that banks can check for duplicate bonds.

These efforts are key elements in the country’s Digital Commerce Development Plan, which was introduced by Minister of Finance Hong Nam-ki on October 14. According to the plan, the blockchain, along with 5G and artificial intelligence, will be used to transform the trading industry and increase export efficiency.

“We will create a digital trading platform that can be easily and conveniently used at all stages of export, including working with contracts, as well as customs and logistics processes,” Hong said.

In addition, a Digital Trade Council will be created, which will include banks, as well as banking and trade associations. According to the document, one of the goals of this initiative is to facilitate blockchain-based foreign exchange transactions. The government plans to merge seven banks by December 2019 to create the appropriate service.

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As part of the blockchain implementation plan, the u-Trade-Hub 2.0 (uHT 2.0) initiative will also be launched to collect information on exports, foreign investment and international projects, which will be available to companies wishing to increase their presence abroad.

Blockchain in trade finance is a direction that interests many large organizations and states. Recently, the first trading deal between Russia and Germany was successfully completed on the Marco Polo blockchain platform. In summer, HSBC made its first transaction through the we.trade blockchain platform for trade financing.