A New Agreement
Shinhan Bank, the second largest in South Korea, has signed a partnership with the Korean telecom giant KT Corp to collaborate on a blockchain platform. By aligning with a key government initiative to push the technology forwards, this promises to be a major boost to the country’s blockchain momentum.
Changing with the Crypto Winds
This is an about face for the South Korean government, who last year issued some grumblings over the safety of cryptocurrencies. When senior government functionaries publicly mulled a ban on cryptocurrencies, the effects showed on the Korean and global markets. Korean citizens attach high importance to their crypto trading and were understandably spooked by an outright crypto ban. The events triggered a sustained downward spiral in the market after December 2017 highs.
Markets had a right to be nervous then, but should breathe a sigh of relief now. The country’s recently formed Financial Innovation Bureau has tasked itself with the objective of promoting cryptocurrency and blockchain development. The technology is no longer a threat but an opportunity.
Shinhan Bank and KT Corp enter the picture with another recent crypto friendly decision. An initiative by regional governments to launch a digital vouchers program that citizens can use in place of cash throughout the country.
The Nitty Gritty
The new digital voucher program rests on the partnership of Shinhan Bank and KT Corp. The two entities have come up with an operating model with the following domain-wise responsibilities:
- Shinhan Bank will provide all financial services in the proposed blockchain platform, for e.g. payment fulfillment, and account management;
- KT Corporation will build the underlying infrastructure of the blockchain platform.
Shinhan Bank is the oldest Korean bank, founded originally as Hanseong Bank in 1897. Headquartered in Seoul, the bank was reestablished in 1982, and of 2017, their assets total around USD 398,211.79M. The bank has simultaneously established a blockchain research center and a blockchain-based certification system to aid financial transactions. When the crypto ecosystem faced uncertainties in South Korea in early 2018, Shinhan Bank was one of the few banks to serve crypto exchanges.
On their part, the state-owned KT Corporation, previously known as “Korea Telecom”, is the largest telecom company in South Korea. A significant feature of their new blockchain platform is an impressive 2,500 ‘Transactions per second’ (TPS) performance capability. The company has made a recent announcement that they are already working to raise the performance to 100,000 TPS, before 2018 ends, an incredible uplift in performance if they can pull it off.
KT Corporation has continued their significant blockchain investment since they formed an exclusive taskforce for exploring blockchain in 2015. Their earlier launch of KT Network Blockchain, a blockchain-powered integrated telecom network has already established their expertise in this area.
The Shinhan Bank – KT Corporation partnership has all the ingredients to positively impact the South Korea blockchain ecosystem. With South Korea’s importance in the global blockchain-crypto space, good news is likely on the horizon.
