- NPS considers blockchain to enhance security in pension fund transactions.
- Blockchain technology could prevent tampering with fund records.
- NPS aims to improve operational efficiency without investing in cryptocurrencies.
According to the pension fund report, South Korea’s National Pension Service is considering using blockchain technology to improve the safety of the pension fund system. The NPS controls the retirement funds of millions of South Koreans and had a total asset value of more than 1,224 trillion won, or $836 billion, as of September.
Enhancing Security and Transparency in Fund Management
The NPS is considering blockchain technology for its fund transaction systems, particularly for tracking deposits, withdrawals, and investments. According to sources in Seoul Economic Daily, blockchain’s shared ledger feature is appealing because it could prevent tampering with fund records. This step is essential for safeguarding the integrity of the funds and ensuring that retirement benefits remain secure.
The NPS is currently in the process of launching a public disclosure phase. During this phase, blockchain experts and companies will have the opportunity to provide feedback. This phase is part of South Korea’s standard procedure for significant public projects and will serve as a foundation for further research into blockchain’s feasibility for the NPS’s accounting system.
The NPS is mandated to use the cross-business benchmark of blockchain uptake in an effort to determine its real-world applicability. The matters disclosed will help the organization fashion the next steps in the research process based on the feedback that would have been available. The idea is to determine how it could improve the pension fund operations by gaining better security, and eliminate fraud or attempts to manipulate records on the system.
Blockchain technology could further enhance the NPS’s ability to compete in securing transactions. This is an advantage since, through the use of a blockchain, the NPS can prevent the alteration of records on its portfolio or any changes that have been made errantly or by unauthorized persons, especially concerning the pension funds for the beneficiaries.
Past Use of Blockchain and Future Potential
The NPS has previously employed blockchain technology to track overseas pension recipients. However, it does not consider investing directly in cryptocurrencies such as Bitcoin. While it has indirect exposure to the digital assets sector through investments in Coinbase and Strategy shares, its primary stress is on improving the operational efficiency and security of its fund management systems through blockchain.
The NPS’s consideration of blockchain technology comes in the wake of various other activities related to blockchain in South Korea. In recent days, the seven-eleven stores of the country have joined a major experiment of the Bank of Korea’s CBDC and has started deploying it as a mode of payment among the citizens. This trial increases the demand for blockchain systems and their application to different industries, such as government and retail.
As the NPS progresses with its blockchain research, it is taking a cautious yet proactive approach. The feedback and research will determine the steps for fully integrating blockchain into its pension fund operations. This move is aimed at ensuring the security of retirement funds and the ongoing trust of pension recipients.
