First in the World
South Korean securities companies will start providing blockchain technology-based authentication service from October for the first time in the world.
According to the Korea Financial Investment Association (KOFIA) on August 24, a total of 18 securities firms – 16 companies that are currently building the blockchain-based authentication system and two other companies that have recently joined the force – will begin offering blockchain-based authentication service in October.
The investment banking industry has formed a task force, examined the current status of blockchain technology and sought new business models from April last year. Based on it, “Investment Banking Industry Blockchain Consortium” consisting of 26 securities companies, including the KOFIA, was established in December last year.
The consortium has decided to build the joint authentication system using the blockchain technology as the first project. The participating companies plan to connect their own mobile trading system (MTS) with blockchain-based joint authentication app and test operate them by the end of this month and start providing the trial service in September. Starting with the 18 companies, the authentication service will be commercialized and expanded to all securities companies from October. The consortium initially planned to offer the trial service in July but postponed the commercialization due to companies’ different system development and establishment.
The construction of securities firms’ blockchain-based authentication system is considered the first case of the blockchain consortiums around the world. Currently, the blockchain consortiums in the United States, the United Kingdom and Japan uses the blockchain technology in overseas remittance and clearing and settlement, but haven’t used in authentication systems.
Starting with the authentication service, the consortium is planning to extend the use of the blockchain technology to clearing and settlement of financial investment products in the second half of next year and to over-the-counter bond and over-the-counter derivative product trading in 2020.