South Korea’s Financial Supervisory Service (FSS) has advised local regulatory agencies and companies to work towards developing an integrated blockchain system for stock transactions, according to an official report published August 2.

The FSS undertook a detailed analysis of international stock exchange operators’ use of blockchain technology to date, focusing on existing initiatives in the U.S., Japan, UK and Australia, among others.

The report concluded that a tamper-proof blockchain-based system would increase the efficiency, integrity and security of tracking and storing transactions. The report added that existing conventional systems that use a centralized ledger are both less efficient and more vulnerable to hacks.

The FSS report specifically studied U.S. exchange Nasdaq’s use of blockchain for record keeping for its private market, using a system called Nasdaq Linq.

It also looked into the London Stock Exchange Group’s blockchain-powered platform for the issuance of private shares, as well as explorations into using blockchain for capital market infrastructure by a Japanese consortium comprised of 36 financial companies.

The most ambitious case study considered by the watchdog was the Australian Securities Exchange’s plans to eventually wholly replace its existing clearing and settlement system with a permissioned, distributed ledger-based alternative.

The report considered that blockchain applications in Korea are still at a relatively early stage, taking note of plans by the Korea Exchange’s KRX Start-up Market to implement the technology for transaction settling transactions of unlisted companies, as well as a blockchain trial project underway by the state-run Korea Securities Depository.

On the basis of its findings, the FSS further pledged to “establish long-term planning and continue to promote proofs-of-concept and pilot projects on a project-by-project basis, [as well as to] continue to study the [application of] blockchain [...] in capital market[s].”

In May, the newly appointed governor of the FSS, Yoon Suk-heun, said that he sees “some positive aspects” to cryptocurrencies, saying that better crypto-specific regulation “would produce” the secure financial system that would make them more accessible.

In July, Cointelegraph reported that Korean regulators had pledged to introduce new legislation that would be conducive to blockchain investment, the same month as three Korean ministries were said to be working to produce the final draft of a comprehensive blockchain industry classification scheme for the country.