The transition could be completed by 2021, while foreign-exchange transactions are set to be conducted using the technology within months.
Trade finance in Korea is headed to the blockchain according to a CoinDesk Korea story and other local press reports.
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.
Software Engineering Firm EPAM Joins Blockchain in Transport Alliance
Software engineering and IT consulting services firm EPAM Systems Inc. has joined the Blockchain in Transport Alliance (BiTA) that develops blockchain practices and standards in the transportation, logistics and supply chain industry.
According to a press release on Aug. 19, EPAM determined 21 real-world use cases of blockchain tech in industries such as life sciences, transportation, logistics, agriculture, consumer packaged goods, manufacturing and retail, insurance and healthcare. The BiTA will purportedly use EPAM’s software engineering expertise to further improve blockchain development and establish standards.
Blockchain hype vs practical applications
Commenting on the collaboration, Jitin Agarwal, EPAM’s vice president of enterprise products, said that the firm wants clients to better understand how distributed ledger technologies can be practically used, stating:
“With all the buzz and hype in the market, some companies assume that blockchain is the ultimate be-all, end-all solution for any business challenge. At EPAM, we’re working closely with our customers to help them truly understand how they can utilize distributed ledger technology, in combination with our other solution offerings, to increase efficiency and unlock new business models.”
Earlier in August, Canada’s transcontinental railway, Canadian Pacific (CP), also joined the BiTA to support improvements in supply chains through blockchain technology. At the time, BiTA president Patrick Duffysaid that blockchain: “has the potential to smooth the transactions that occur between shippers and carriers, but it requires the active participation of transportation leaders like CP.”
Blockchain has been gaining popularity in the transportation and supply chain industries. Recently, the national carrier of the United Arab Emirates Etihad Airways partnered with Winding Tree, a blockchain-based platform for the travel industry, to research how blockchain can aid in distribution.