Korean Exchange to Launch Blockchain-Based OTC Trading Platform in September
The Korea Exchange (KRX) is working in collaboration with the Financial Services Commission (FSC) on the design and development of the KPM platform, a Korean version of the NASDAQ Private Market, which will be using blockchain technology and mobile applications to allow users to trade unlisted securities.
The platform, which is expected to be launched in September, will be focusing on new businesses which have matchless technical skills and high growth potential, according to a report from Business Korea.
On KPM, a seller and a buyer would be able to submit and check orders, and trade using a mobile app. They would be able to negotiate and conclude transactions via chat on messenger apps. Additionally, account transfers, deals and asking prices will be announced in real time right after the conclusion.
KRX, South Korea’s main bourse operator for trading, said earlier this month that the new blockchain-based platform was aimed at revitalizing its over-the-counter (OTC) trading offer.
“Though many steps remain before the system’s official launch, we expect this would help off-board dealers to trade more easily by saving their costs and efforts in seeking trade partners,” a KRX official told the Korea Times at the time.
A number of bourse operators around the world have started trialing blockchain systems for stock trading in a move to streamline processes and cut costs.
Japan Exchange Group (JPX) is currently experimenting with blockchain technology for clearing and other operations. The Japanese bourse operator has teamed up with IBM Japan to run proof-of-concept tests for the blockchain platform.
Australian Securities Exchange (ASX) announced in January that it was building a blockchain-based system to replace its current platform for clearing and settlements of trades. ASX picked Digital Asset Holdings to develop the blockchain solution for the Australian market.
The announcement of Korea Exchange’s new blockchain-powered OTC trading platform comes amid growing interest in blockchain technology in South Korea.
In February, KB Kookmin Bank announced that it was developing a blockchain solution for international remittances in collaboration with local bitcoin startup Coinplug. Utilizing blockchain technology eliminates the need of intermediaries, and could reduce costs and result in possible savings for customers, KB Kookmin Bank said.
The news came shortly after a report authored by the Bank of Korea’s Payment Systems Research Team urged the central bank to start exploring blockchain technology.
The report, which claims that blockchain technology has the potential to disrupt the financial market infrastructure and central banking, advises financial institutions, startups companies and government branches to start cooperating and exploring how the technology could increase efficiency and help reduce costs.