Intro

Blockchain is a key technology that is changing the paradigm of financial services. It enhances system efficiency by leveraging distributed ledgers, expands the range of digital asset utilization, and maximizes programmable environments. It enables faster and more efficient processing of financial transactions through creation of real-time payment and settlement systems, and enables the seamless integration of various digital assets such as CBDCs (central bank digital currencies), stable coins, and STOs (security tokens) into the financial system. It also enables automation of financial services through the use of Smart Contracts for faster and more transparent implementation of contracts. HIT conducts research on optimizing blockchain technology for financial institutions, including in digital asset management, heterogeneous blockchain connectivity, and Smart Contract security. Based on this, it continues to explore and expand practical use cases of blockchain tech in the financial sector.

What is
Blockchain?

Blockchain enables reliable data records based on distributed ledger technology (DLT). In the financial system, blockchain tech is used to ensure the integrity of transaction history, prevent data forgery, and support automated financial services using Smart Contracts. Effective operation of blockchain services requires the seamless combination of various technologies and factors from network infrastructure to application layer. The figure below illustrates the composition of a blockchain system.

As such, blockchain services are not a single technology, but rather a tightly connected service of network, infrastructure, and applications. At HIT, we research a variety of technologies, from the payment and settlement layer to the aggregation layer, and develop each factor so they work together organically. For the financial sector to effectively utilize blockchain technology, it is necessary to understand the roles and functions of each layer and apply the technology which accounts for its connectivity with financial services. Blockchain tech can be used particularly in the financial sector for services such as CBDCs, Stablecoins, Security Token Offerings (STO), and digital asset custody. This may lead to the construction of a new financial infrastructure, reduced costs, and improved transaction reliability.

Future Research

HIT studies blockchain technology optimized for financial services and aims to build a digital financial infrastructure that is both secure and scalable. Key research areas include key management and security technologies, heterogeneous blockchain connectivity, development of blockchain-based financial services, and convergence of AI and blockchain. We research key management technologies to enable financial institutions to securely protect digital assets, and develop data and asset exchange technologies between various blockchain networks to strengthen connectivity with financial services. Additionally, we are working to maximize the utilization of Smart Contracts and digital assets, and to expand blockchain-based financial services within HFG. HIT will continue to research blockchain technology that can be practically utilized in the financial sector and play a leading role in the innovation of financial services.