South Korea’s central bank has signed a memorandum of understanding (MoU) with the country’s Financial Settlement Service to take over the management of BankSign; a blockchain authentication certificate service.
Central Bank Acquires BankSign
According to The News Asia, the move is the latest step by the Bank of Korea (BOK) to move the country’s financial system to a more robust digital framework. By acquiring BankSign, South Korea’s apex bank is advancing the commercialization of blockchain technology in the banking sector.
Samsung SDS and the Korean Federation of Banks launched BankSign back in August 2018. BankSign is a blockchain-based co-verification system that allows for the transfer of customer authentication data among banks and other financial institutions.
The existence of South Korea’s infamous “Digital ID” (DID) framework rendered BankSign of little use. However, since 2018, stakeholders have been calling for an abolition of DID with the country’s parliament finally discontinuing the service back in May.
The BOK’s adoption of BankSign comes as South Korea’s private sector is racing to deliver services that will replace the now-defunct DID system. Major conglomerates like Kakao and Samsung are reportedly developing DID alternatives. Earlier in June, SK Telecom, KT, and LG Uplus launched ‘PASS,’ a blockchain-based driver’s license authentication platform.
South Korea’s central bank plans to offer BankSign as a replacement for DID. The COVID-19 pandemic is forcing South Korea’s banking stakeholders to consider digital alternatives for face-to-face operations.
Since the onset of the outbreak, organizations have been adopting systems that allow them to continue their operations over the digital space. Some crypto and blockchain pundits believe that the ongoing crisis will be net positive for the emerging industry in the long run.
Commenting on the benefits of adopting BankSign, a BOK official told The News Asia:
“I expect that through cooperation, we will be able to realize cost reduction, service improvements, and discovery of new businesses.”
South Korea’s Accelerated Blockchain Push
The BOK adopting a blockchain digital ID system is only the latest in a series of government-led actions targeted at promoting greater utilization of the novel technology.
After a two-year period of harsh laws that stifled the country’s once-promising blockchain space, South Korea appears on the be back on the bandwagon especially with China’s accelerated digital development.
As previously reported by BTCManager, the government is partnering with Sendsquare to utilize blockchain in medical storage.