Shinhan Bank, the oldest bank in South Korea, is building a distributed ledger technology (DLT) enabled the stock lending platform.
After this service is introduced, individuals will be able to borrow and lend securities with other individuals directly, instead of going through an intermediary. The news was reported by Economic News and other local Korean media outlets.
Securities lending and borrowing transactions are mainly inefficient and costly for all. The commission could be high and accurate info hard to collect. Using the P2P service, individual owners of stock can easily and cheaply lend their shares instantly to others, earning a fee in the process. Individual short-sellers will be able to borrow stock from prepared counterparties without any need to pay excessive fees to large institutions.
According to the report, Shinhan Financial Investment, which is the brokerage associated with the country’s second-largest banking group by asset has signed a deal with the financial services firm Directoral to build a blockchain-based stock lending service on May 28. Personal stock lending is a share of the broader development of innovative financial services which are presently being pursued by the firm.
At the end of May, Shinhan bank released a blockchain-enabled lending platform to boost cost and time efficiencies in the lending process, mainly allowing the public to apply for loans online and provide credits without any need of face-to-face conversion. Nelson Chu, founder, and CEO of Cadence said that the securitization market for private credit has been in “desperate need of innovation.”
Similar to other banks in Korea, Shinhan is very enthusiastic regarding blockchain than cryptocurrency, tracking the government official position but running counter to customer desire for coins.
The bank has been optimistic about crypto and accepted deposits of cryptocurrencies. However, due to increased inspection by the authorities from 2018, and with the launch of new FATF standards, the bank has raised its oversight of crypto-connected accounts and is instituting systems and processes to meet with the account requirements and know-your-customer requirements.