The Shinhan financial investment group will soon be offering peer to peer (P2P) stock lending via the Blockchain.
With the new service set to be launched later this year, users will be able to borrow and lend securities with other individuals directly, rather than going through intermediaries. This is according to the economic news, as well as other local media outlets.
This piece of news is so exciting and game changing since securities lending and borrowing transactions are normally inefficient and expensive for most people, unless you are a big investor. Another challenge is that, commissions can be quite high, with accurate information difficult to obtain. The P2P service turns the whole game on its head though, since individual owners of stock should be able to easily and cheaply lend their shares directly to others, earning a fee in the process.
Individual short sellers will also benefit since they will potentially be able to borrow stock from willing counterparts without having to pay exorbitant fees to large institutions. Shinhan Financial investment- a brokerage that is closely related to the country’s second largest banking group of assets- is developing the P2P service in cooperation with Directional. Directional is a South Korean outfit that has been given the green light by the financial services commission (FSC) to provide stock lending and borrowing as part of the sandbox’s initiative.
The Shinhan Bank has been very proactive in its push for Blockchain solutions. In 2017, the bank started putting the technology to use in the verification of its gold bars. Since then, the bank has made use of the technology in interest swaps and cross-border remittances. Back in May, it was reported that the bank would be using the technology in loan verification, enabling customers to submit documents electronically that often had to be presented in paper and authenticated manually.
Like most Korean commercial banks, Shinhan has been more interested in the Blockchain than pure cryptocurrency; but it has also shown more of a willingness to accept crypto transactions that had been turned down by other banks. The bank has recently though, upped its surveillance of crypto related accounts following increased scrutiny by authorities and the new FATF standards. The bank is also instituting systems and procedures to enforce real-name account requirements and adhere to know-Your-Customer best practices.
Just like other banks in that jurisdiction, Shinhan is currently re-negotiating its crypto exchange deposit agreements, with an extension of its deal with the local exchange its serves- Korbit- possibly on the cards though not guaranteed.
Image Courtesy of ajunews.com
