KRX seeks share trading through blockchain

By Nam Hyun-woo

Korea's bourse operator said Monday that it is seeking to launch a platform powered by blockchain technology to invigorate the off-board trading market.

The Korea Exchange (KRX) has begun "preliminary steps" to introduce the new platform linking sellers and buyers to trade securities directly, according to an official there.

Blockchain is a distributed ledger technology used to power the Bitcoin online currency. It has a peer-to-peer connection and keeps a record of all ownership transactions in decentralized ledgers, removing the need for a middleman.

"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," the official said, adding that it is too early to set the launch date.

So far, after-hours dealings are made through securities firms or direct trading between dealers. The size of the outside dealing market reportedly stands at some 56 trillion won. The platform will be first introduced for non-listed securities, which are widely exchanged directly between dealers.

The U.S. NASDAQ in December made the first share trade using blockchain technology, through its blockchain-powered platform, Linq. Australian Securities Exchange last month announced that it is building a blockchain as a replacement for its current platform for clearing and settlement of trade. The Japan Exchange Group also said that it will run "proof-of-concept" tests for the use of the technology.