South Korea’s oldest bank, Shinhan, has signed a memorandum of understanding with two fintech companies in order to build a blockchain-based security system, The Korea Times reported today.
According to the publication, the bank signed an agreement with blockchain developer Hexlant and financial technology startup GroundX. The three companies will jointly develop a Private Key Management System for Shinhan’s banking services. One of Shinhan Bank officials commented on why the partnership was needed, saying:
“Blockchain technology has gained attention from the financial sector for its advantages, but financial firms have experienced difficulties in applying the technology to their system.”
The roles in this partnership have already been made public, with GroundX, the blockchain subsidiary of messaging app provider Kakao, being responsible for providing the underlying blockchain-based platform. Hexlant on the other hand will create an infrastructure that is supposed to include an anti-cracking program, and Shinhan Bank will provide a “convenient user-friendly interface”.
Earlier this year, GroundX launched its own blockchain called Klaytn, to be used across Kakao’s services. Recently Samsung added support for the native cryptocurrency of the Klaytn blockchain to its Software Developer Kit (SDK).
This is not the first time that Shinhan Bank has developed a product using blockchain technology. Earlier this month a report from South Korea’s Econonews showed that the bank has started work on a stock lending platform utilising a Distributed Ledger Technology (DLT) in partnership with financial services company Directional.