The transition could be completed by 2021, while foreign-exchange transactions are set to be conducted using the technology within months.
In terms of trade finance, relevant documents will be shared on the blockchain so they can be accessed by financial institutions while export bonds will be made available in the same way so that banks can check for duplicate issuings.
These efforts are key elements in the country's Development Plan for Digital Trade, which was introduced by Finance Minister Hong Nam-ki on Oct. 14. Under the plan, blockchain, along with 5G and AI, will be utilized to transform the trade environment and strengthen exports.
"We will build a digital trading platform that can be easily and conveniently used in all stages of export, such as contracts, customs and logistics," Hong said.
A Digital Trade Blockchain Council will be assembled, with a membership including banks, banking associations, trade associations, and the Korea Trade Network (KTNet), which specializes in the automation of trade processes.
The document also mentions that one of the goals of the initiative is to promote blockchain-based foreign exchange transactions. It sets a target of bringing together seven banks by December 2019 to establish the service.
Another element of the plan that will utilize blockchain is the u-Trade-Hub 2.0 (uHT 2.0) initiative. It will use the technology to bring together information on exports, foreign investment and international projects, which will be made available to companies wishing to build up their overseas presences.
Blockchain in trade finance is an area of intense interest globally, and considerable progress appears to have been achieved already. Voltron has brought together some of the world's largest financial institutions, China Construction Bank is claiming that it is already processing huge volumes on its blockchain trade-finance platform, while UBS took we.trade live earlier this month.
In Korea, HSBC earlier this year said it was looking for local banks as partners in developing its blockchain trade finance efforts.
Image via Shutterstock.
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