South Korea's Shinhan Bank to offer blockchain-based securities lending.

The oldest bank in Korean history, Shinhan Bank, is developing a "lending" platform based on Distributed Ledger Technology (DLT), which will offer peer-to-peer (P2P) stock lending through blockchain.

Shinhan Bank is a bank headquartered in the central district of Seoul, South Korea. Established in 1897, it was the first private bank in Korea's history and is now a significant part of the Shinhan Financial Group, making it a prominent bank in Korea.

Shinhan has recently signed an agreement with the financial services company Directional on 5/28. Directional is currently licensed by the Financial Services Commission (FSC) to provide stock lending services, and the two parties have agreed to develop blockchain-based stock lending services. Individual stock lending is part of the innovative financial services that Shinhan is looking to expand.

According to a report by local media Econonews, individuals will be able to directly borrow and lend securities to others when the new service is launched this year, bypassing intermediaries such as banks.

In the past, securities lending transactions were less commonly used by retail investors due to factors such as inefficiency and high costs, as they typically involved large institutional investors or financial institutions. Through peer-to-peer (P2P) services, retail investors should be able to more easily and affordably lend their stocks directly to others and charge fees in the process. Individual short sellers may borrow stocks from willing counterparties without having to pay high fees to large institutions.

This is not Shinhan's first blockchain service launch.

At the end of May, they also introduced a blockchain-supported "loan" platform to improve the cost and time efficiency of the customer loan process. Reportedly, the public can apply for loans online and obtain credit without face-to-face interaction. As Nelson Chu, the founder and CEO of Cadence, said:

The securitization market for personal loans has been in "dire need of innovation."

In May of this year, there were reports circulating that Bursa Malaysia, based in Kuala Lumpur, Malaysia, is also preparing to launch a proof of concept for blockchain-based security borrowing and lending.

Further Reading

• South Korea's Largest Credit Card Company Secures Patent for Cryptocurrency Credit Payment Technology
• Samsung Joins Financial Consortium to Develop Mobile Identity System

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