Korean Government to Integrate Blockchain into Real Estate Transactions

The Ministry of Land. Infrastructure, and Transport in South Korea announced the creation of a blockchain-based real estate transactions platform. The goal of the platform is to build an electronic real estate contract system integrated into the existing offline system that can process contracts and registrations at once.

In order to implement this new system the ministry established a council that will aid in the steps needed to fully integrate blockchain. The consulting body will consist of real estate-related organizations such as financial institutions and other government offices. This council will carry out business re-engineering and information strategy planning (ISP), mainly focused on the transaction information system and it’s UI/UX, connections with public ledgers, and discovery of service models.

To this end, the Ministry of Land, Infrastructure, and Transport plans to complete the project after selecting a business operator by June at the latest. A representative from the ministry said “This year, we plan to put together the business end of this system in earnest.” They plan to have the entire system working in earnest by 2023, and to invest about $16.5 million over the next four years.

The Ministry of Land, Infrastructure, and Transport first introduced blockchain into a real estate project in 2018. That project was the ‘Blockchain Public Leading Pilot Project‘ done in collaboration with the Ministry of Science and ICT and KISA. That project was meant to allow real estate transaction parties to visit banks without a paper certificate and receive loans by sharing the land register data in real-time via blockchain.

The new project is intended to expand that scope more by building a blockchain-based real estate transaction and information sharing platform that can be used at banks, courts, administrative agencies, and private platforms.

The integration of blockchain at this scale and/or scope does not impress many people vested in the real estate market who feel that this new project is essentially putting the cart before the horse. They decry the lack of a system in the other fields that are meant to connect with the new real estate transaction system. That is, if the new platform will link with financial fields, courts, administrative agencies, and others, those other fields need to have a corresponding blockchain-based system as well. Without it, one commenter notes, the money and real estate power will “fall into the hands of those who have extra mone…”

Others note the inherent benefits of blockchain integration into the real estate industry. One shared, “Blockchain is an essential part of real estate transactions. It is not a matter of convenience, but a core technology that can solve problems in mortgage loans.” He continued by saying that if it is managed properly, it will be a great help to the people.

We know for sure that the Korean government via various ministries is aggressively pursuing blockchain projects meant to increase efficiency of existing systems and connect as-of-yet unconnected systems that will ultimately reduce the size of the national bureaucracy. Although there are no known projects in development to connect this new real estate transaction platform with other fields via blockchain, there very well could be in the near future that enriches all connected systems.