Central Bank of South Korea is working on a blockchain bond issue

South Korea's central bank is working on issuing its own bonds on the blockchain and exploringthe capabilities of the technology for recording transactions with securities in a distributed registry.

At the end of last year, the Bank of Korea issuedproof of concept (PoC) in order to transfer records of transactions with bonds held in a securities depository to a blockchain system with access for multiple nodes.

In addition, the Central Bank is creating a system forBlockchain-based debt issuance. According to the developers, the project will involve individual nodes under the control of the Korean Fair Trade Commission, the Bank of Korea, as well as other regulatory bodies and financial institutions of the country.

Local authorities have confirmed that many financialorganizations are already testing the blockchain for issuing government bonds and recording transactions with securities in a distributed registry, as well as checking the possibility of making payments in real time.

Exploring the potential of blockchain in the debt marketobligations, the Bank of Korea followed the example of the World Bank, which last year, together with the Commonwealth Bank of Australia, first tested blockchain in recording bond trading transactions in the secondary market. Later, China's commercial bank Bank of China also issued $2.8 billion worth of blockchain bonds for small businesses.

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