South Korean Financial Watchdog Touts Blockchain in Fintech Plans

The South Korean Financial Services Commission (FSC) has aired plans to encourage the use of blockchain technology in new payment systems in order to better protect user information.

According to Korea JoongAng Daily, the FSC will introduce new regulations to open the doors for banks and insurance companies to protect customer data and simplify verification processes with blockchain solutions.

FSC Chairman Choi Jong-ku told reporters this new blockchain-friendly approach to its fintech policies could give the local jobs market a boost, saying:

"The players in the financial service market are becoming more diverse, with new companies entering, and the competition in the financial market is becoming fiercer. ... Fintech is an area that requires new technologies, and it will solve the youth job problem by increasing job positions for young people."

As part of its fintech roadmap, the FSC will also allow more small and medium-sized companies to access more customer data through digital payment systems. Regulators hope this move will inspire new products and services in the burgeoning fintech sector.

The government also plans to approve a more accessible payment system called "app-to-app," which lets users make purchases from sellers via apps, avoiding paying fees to credit card companies or card network providers. Banks will still take fees, however.

For example, a PayPal-backed startup called Toss has been experimenting with app-to-app payment options for Korean customers in Seoul and Jeju since last July. The firm added support for mobile bitcoin transactions in 2017.

Meanwhile, the Korea Times reports that local regulators may soon issue new and less harsh cryptocurrency regulations for initial coin offerings, having banned them in September of last year.

South Korea flags

image via Shutterstock

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