South Korean government will create a consortium to develop and implement blockchain technology in financial sector within this year and institutionalize the virtual currency Bitcoin in a bid to lead the future financial ecosystem with safer and easier transactions, said financial chief on Monday.

“We have built the foundation for fintech industry over the past two years. Now, we are ready to take the next step, reforming financial regulations and system,” said Yim Jong-yong, chairman of the Financial Services Commission at an event introducing government-led fintech online support center.

Yim underscored that blockchain technology has become a key infrastructure of the future financial system. He unveiled a plan of creating a blockchain consortium that brings all members in financial industry together within this year and lead joint study and pilot projects on blockchain technology.

A blockchain is a public ledger of digital currencies where all participants share information on financial transactions rather than having a centralized ledger for verification, thus making transaction more secure and simpler while lowering costs. It was adopted upon the introduction of virtual currency Bitcoin in 2008 in a bid to implement a financial system where regulations by government and central banks are unnecessary.

The government will also systemize the digital currency Bitcoin on a full scale. In Korea, there have been movements by individual financial institutions developing and commercializing blockchain-based financial service but the state has been comparably slow in adapting to the new wave of digital currency. Some of the country’s major commercial banks are already taking part in a global consortium of financial institutions called the R3 CEV for research and development of blockchain usage in the financial system.

By Park Yoon-ye

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