Shinhan Brokerage, South Korea, to offer securities lending based on blockchain

Shinhan Financial Investment will soon be offering peer-to-peer (P2P) equity loans via the blockchain.

When the new service is introduced this year, individuals will be able to borrow and lend directly to others, rather than through an intermediary. Economic news and other local Korean media reported the news.

Securities lending and borrowing transactions are normally inefficient and costly for all except for large investors. Commissions can be high and specific information difficult to obtain. With a P2P service, stock owners need to be able to easily and easily sell their shares directly to others, while earning fees. Individual short sellers will be able to potentially borrow shares from willing counterparties without having to pay exorbitant fees to large institutions.

Shinhan Financial Investment, which is a broker linked to the country's second-largest banking group in terms of badets, is developing this capacity in cooperation with Directional, a Korean company authorized by the Financial Service Commission (FSC) to provide loans and borrowings. titles part of the government sandbox initiative. The sandboxes, which are aggressively pushed by the current administration, allow a temporary lifting of the regulations relating to the testing of innovative technologies and services.

Directional received its exception in May as part of a sandbox program on the financial markets announced by the FSC in April. No timetable has been announced for the deployment of the Shinhan offer.

Shinhan Bank has been aggressive in its search for blockchain solutions. Two years ago, the company began using technology for the verification of gold bullion. Since then, he has used it for interest rate swaps and cross-border remittances. In May of this year, it was announced that the bank would use this technology for loan verification, allowing clients to electronically submit documents that were previously required to be paper-based, often in person, and manually authenticated.

Like most commercial banks in Korea, Shinhan has been more enthusiastic about blockchain than pure cryptography. It followed the government's official stance but went against the customers' appetite for coins.

The bank has for a while been more optimistic about cryptography and has accepted deposits from cryptoexchanges and exchange customers rejected by other banks. But in the light of the increased control exercised by the authorities since 2018 and the new FATF standards, the bank has strengthened its oversight of encrypted accounts and put in place systems and procedures to enforce real name account requirements. and adhere to Customer Best Practices.

Like other banks, it is currently renegotiating its cryptocurrency deposit agreements. Although an extension of its contract with Korbit, the local switch served, is expected, nothing is guaranteed given fears of fraud.

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