South Korea’s Korea Credit Data, a FinTech startup that operates in the small- and medium-sized business accounting software market, said it is exploring an entrance into the world of blockchain.
Reports in The Korea Herald said Friday (April 27) that the company revealed the launch of a new project to use blockchain to develop a solution to lower procurement costs for SMB customers. The nation's largest cryptocurrency exchange, Upbit, is collaborating with Korea Credit Data, reports said, to develop the solution, which will also aim to enable SMBs to more easily access structured securities.
Korea Credit Data chief executive Kim Dong-ho said Dunamu venture capital subsidiary Dunamu & Partners is backing the initiative, though reports did not reveal financial details of their involvement. According to the publication, an estimated 70,000 customers use Korea Credit Data solutions’ CashNote mobile accounting software.
The involvement of the nation’s largest cryptocurrency exchange comes as the government cracks down on such firms. Earlier this month government officials detained the head of Coinnest, the nation's sixth-largest cryptocurrency exchange — as well as the head of another, unnamed exchange — on allegations of embezzlement of customer assets.
Earlier raids of cryptocurrency exchanges in South Korea have occurred as well, though the country is reportedly stopping short of banning cryptocurrency trading. Earlier this year Finance Minister Kim Dong-yeon said there is “no intention to ban or suppress the cryptocurrency [markets],” according to reports.
Korea Credit Data’s initiative highlights a less common application of blockchain technology in the corporate finance space, though details of the project are scarce. Distributed ledger technology is often eyed in supply chain finance and management, with South Korean technology giant Samsung one of the most recent companies exploring blockchain for this purpose.
“It will have an enormous impact on the supply chains of manufacturing industries,” said Samsung SDS VP and blockchain chief Song Kwang-woo of blockchain technology earlier this month. “Blockchain is a core platform to fuel our digital transformation.”