LG CNS is entering the blockchain infrastructure market to support digital asset initiatives for financial institutions. The platform provides essential features for digital asset services, including e-wallets, transaction processing, fee payment, and transaction history collection.
On October 6, LG CNS announced the launch of its blockchain infrastructure platform, 'KITL.' This platform offers the necessary infrastructure for banks, securities firms, credit card companies, and payment service providers to build digital asset services such as stablecoins, security token offerings (STOs), and real-world asset (RWA) services.
KITL includes four essential functions for digital asset operations: e-wallet, transaction processing, fee payment, and transaction history collection.
While financial institutions have traditionally recorded and managed customer transaction histories within their systems, digital assets operate on public blockchains. Therefore, to provide digital asset services, financial institutions require separate infrastructure connected to the blockchain for asset custody, transaction processing, fee payments, and transaction record collection.
According to LG CNS, KITL offers these capabilities through its four key functions.
The e-wallet functions like a bank account, storing digital assets and performing electronic signatures during transfers. Typically, the private keys required for electronic signatures are stored in hardware security modules (HSMs), which have limited storage capacity. LG CNS has developed a method that generates private keys only when needed for signatures and discards them afterward, allowing the issuance of wallets to millions of customers without the need for additional equipment. The company has completed the patent registration for this technology.
The e-wallet technology has been applied in the Bank of Korea's digital currency pilot project, 'Project Han River,' and has been expanded to work with both private and public blockchains. The technology was validated in a real transaction environment involving seven participating banks and approximately 80,000 customers who conducted actual payments at convenience stores and supermarkets.
Transaction processing tracks the status of transactions requested by financial institutions until they are successfully processed on the blockchain and communicates the results. Fee payment manages the distribution of blockchain usage fees, known as 'gas fees,' according to the agreements made by service providers such as banks and credit card companies.
Transaction history collection retrieves only the relevant transaction records from public blockchains worldwide. For instance, issuers can use this to compare the total issuance of stablecoins with dollar and won deposits, while stablecoin distributors can utilize it for settlement, accounting, and auditing purposes.
LG CNS highlighted the scalability of KITL as one of its strengths. Building separate infrastructure for each type of digital asset, such as deposit tokens, tokenized securities, and stablecoins, could lead to redundant investments as businesses expand. KITL is designed to allow the four core functions to be used collectively across various digital assets and blockchain networks. This means financial institutions can leverage existing infrastructure when adding new digital assets or integrating other blockchain networks like Solana alongside Ethereum.
LG CNS has also established a global partner ecosystem centered around KITL. The company has signed memorandums of understanding (MOUs) with five leading global blockchain firms to address various areas necessary for digital asset businesses.
Collaborations include working with Circle, the issuer of the stablecoin USDC, and Securitize, a platform for issuing and managing tokenized securities. They are also partnering with the Canton Foundation, a global financial transaction blockchain foundation, Chainalysis, a blockchain intelligence platform, and Chainlink.
With Circle, LG CNS will develop digital asset infrastructure and solutions tailored to the domestic technology and regulatory environment. Together with Securitize, they will co-develop solutions for tokenizing funds and bonds in compliance with domestic regulations. The partnership with the Canton Foundation aims to establish infrastructure that enables domestic financial institutions to participate in the Canton network.
In collaboration with Chainalysis, LG CNS will integrate transaction monitoring capabilities into KITL to help financial institutions detect and block the inflow of funds related to criminal activities. The partnership with Chainlink will focus on integrating KITL with Chainlink services.
Kim Hong-geun, Vice President of LG CNS's Digital Business Division, stated, "We will provide the necessary infrastructure and global partnerships for digital asset businesses through KITL, enabling financial institutions to start services as soon as regulations are implemented."
* This article has been translated by AI.
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