According to the Bank of Korea and the financial market on the 18th, KHNP is selecting a provider at the end of last year and developing a blockchain bond system.
The difference with current bond transactions is that the records maintained by the Korea Securities Depository are transformed into a distributed LEDGER format where multiple nodes share information at the same time by applying blockchain technology.
In the distributed ledger method, when a transaction occurs, the participants of the transaction record the contents in their respective ledgers through agreement. The BOK, the KFTC, and other financial institutions involved in the transaction fall into each node.
The Bank of Korea’s research is being conducted with reference to the case of the World Bank. The World Bank has issued Blockchain Bond Bond I (BOND-I) with the Commonwealth Bank of Australia (CBA) in 2018.
Issued in August 2018 with a two-year maturity, BondEye is a bond issued based on a private Ethereum protocol that restricts participants.
Unlike the World Bank, the Bank of Korea conducted tests on the assumption that bonds have already been issued, except for the issuance process. The test is currently in the proof of concept (POC) phase to boost research capabilities.
It is also pointed out that in order to introduce blockchain bonds, it is necessary to have a law to clarify accountability in case of a transaction problem. Unlike the centralized management system, the application of distributed ledger technology can make the responsible material unclear in case of an accident.
An official said,
“We use government bonds to record securities and cash transactions in a distributed ledger and test whether a real-time simultaneous payment trading system is possible.”
The World Bank raised a total of $74 million for its two-year blockchain bond as of August 2019. South Korea’s central bank announced in late 2019 that it would be setting up a dedicated group to research central bank digital currency in 2020.
Get the latest in Asian Bitcoin news here at Coin News Asia.
