Largest Banks in South Korea to provide FX Rate Information to DeFi Services
Four major banks in South Korea have collaborated with a decentralized platform for providing foreign currency exchange rate information to blockchain-based DeFi (Decentralized finance) services.
The banks will join the blockchain Oracle solution Chainlink (LINK) along with Korean fintech platform CentrePrime. The participant banks in this project are Shinhan Bank, KEB Hana bank IBK Bank and Nonghyup (NH) Bank.
The banks will provide real-time foreign exchange (FX) currency rates data feed to the DeFi service providers through the Chainlink nodes. This will help the providers to utilize the rates information while creating the contracts on blockchain platforms.
Statements from Chainlink and CenterPrime
At the recent On-Chain Fintech Conference in Seoul, Chainlink Co-founder and CEO Sergey Nazarov called this venture as a revolutionary opportunity and urged the local banks to participate in this “smart contract revolution”.
He stated, “I think banks can participate in the smart contract revolution and blockchain. And then how they’re going to reinvent the global financial system is by the providing of various data, the providing of various services to these financial products.”
CenterPrime has claimed this venture as a milestone move in the Korean fintech industry. CentrePrime has been connected to the Korean open banking API that procures FX rate data from several local banks.
“This integration with Chainlink marks a major breakthrough for the Korean fintech industry. For the first time in history, applications will be able to access decentralized foreign exchange rates compiled by the best banks in Korea.”
With this venture, more Korean user participation is expected in the De-fi services sector. The DeFi services are looking forward to increasing their reliability by minimizing oracle problems while pulling out the data from the blockchain.
What are Oracle problems?
While providing financial services, external data is pulled from various sources which can be unreliable or falsified. The information on the blockchain cannot be falsified once it’s feed on the blockchain but before the information is fed on the blockchain, it can be incorrect and needs to be verified. This is referred as Oracle problem.
‘Oracle Solution’ is a project that solves the Oracle problem by verifying the external data before it is fed on the blockchain. Chain link is one of the representative Oracle solutions and the majority of the DeFi sector uses Chainlink solution.