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South Korea's Financial Watchdog Calls for Integrated Blockchain System for Stock Trading

South Korea’s Financial Supervisory Service (FSS) has advised local regulatory agencies and companies to work towards developing an integrated blockchain system for stock transactions, according to an official report published August 2.

The FSS undertook a detailed analysis of international stock exchange operators’ use of blockchain technology to date, focusing on existing initiatives in the U.S., Japan, UK and Australia, among others.

The report concluded that a tamper-proof blockchain-based system would increase the efficiency, integrity and security of tracking and storing transactions. The report added that existing conventional systems that use a centralized ledger are both less efficient and more vulnerable to hacks.

The report considered that blockchain applications in Korea are still at a relatively early stage, taking note of plans by the Korea Exchange’s KRX Start-up Market to implement the technology for transaction settling transactions of unlisted companies, as well as a blockchain trial project underway by the state-run Korea Securities Depository.

In May, the newly appointed governor of the FSS, Yoon Suk-heun, said that he sees “some positive aspects” to cryptocurrencies, saying that better crypto-specific regulation “would produce” the secure financial system that would make them more accessible.

In July, it was reported that Korean regulators had pledged to introduce new legislation that would be conducive to blockchain investment, the same month as three Korean ministries were said to be working to produce the final draft of a comprehensive blockchain industry classification scheme for the country.

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