Bank of Korea(hereinafter, BOK) hast started to research ‘Delivery versus Payment (DvP)’ on a blockchain. It aims to propose a theoretical model of risk management in the security transaction by using a smart contract.
BOK has established a task force (TF) to test-run of DvP on a blockchain on July 23. Financial institution and academia are cooperating in the task force. One personnel each from financial clearing department and information system department of the BOK and 4 of the professors, including Seoul National University and other blockchain experts are consisting a team.
The initial target is to make a design scheme that realizes blockchain DvP by the end of September. If there is a relevant result, proof of concept (PoC) will be conducted during the rest of 2019.
DvP is a method in which the delivery of a security and its payment are simultaneously conducted. In DvP, Central security depository’s security settlement system is connected to the payment bank’s settlement system. In the case of Korea, the financial network of the BOK and the security settlement system of Korea Securities Depository (KSD) are connected for the major security transactions.
The BOK has started the test-run on the financial networks where the payment settlement is conducted. There is no plan to cooperate with KSD for this time’s test-run.
The BOK has concluded that it is impossible to realize the DvP entirely on the existing system. Therefore, it is considering to adopt a smart contract for the security of settlements, because any transactions that satisfy the fixed algorithm are automatically settled in a smart contract.
Anonymous personnel from BOK said that the BOK has decided that blockchain is the best circumstance to operate smart contract. Therefore, it is conducting a test-run before the PoC. However, it is still in a simulation stage, and nothing is decided yet.
It is the third time conducting the test-run subjecting the financial network of BOK. BOK has been running the relevant tests in macro payment and micropayment on blockchain since 2017. They have completed a test of transferring fund between financial institutions using R3CEV financial platform Corda in February 2018. Consequently, a fund transfer test between individuals is also completed through BLOCKO in January 2019.
However, the test-run may end up as just another academic research. The previous two tests of BOK were concluded as ‘Too early to apply for the blockchain transfer.’ The lack of efficiency (transaction speed) and stability were the reasons the BOK’s conclusion.
Ham Jihyeon (2019. 07. 23.) 한은, 블록체인상 DvP 구현 시뮬레이션 착수…”증권거래 리스크 관리 방안 연구”
ET News, retrieved from http://www.etnews.com/20190723000231
