Seoul National University College of Engineering (Dean Byoungho Lee) announced on October 14 (Thursday) that a joint research team of Yunyoung Lee, a researcher at the Statistical Learning & Computational Finance Laboratory of the Department of Industrial Engineering, Professor Jaewook Lee (Co-authors: Bumho Son, Junyoung Byun, and Tae-ho Yoon) and Professor Huisu Jang of Soongsil University's Department of Finance, developed a crosschain asset exchange model that enables connections between multiple blockchains that can be used for the Central Bank Digital Currency (CBDC).
 
With the recent development of blockchain technology and the growing interest in digital currency issued by central banks, the central banks around the world are actively developing CBDC models and are verifying their validity.
 
In particular, in blockchain-based systems, technology that can safely exchange assets between multiple ledgers is essential for future scalability and interoperability between systems, and to this end, Project Stella - a joint research study between the European Central Bank and the Bank of Japan - and Project Ubin of the Monetary Authority of Singapore are using the Hashed Timelock Contract technology.
 
However, in the case of the Hashed Timelock Contract, there is the issue of the settlement risk within the contract being biased toward one of the participants, making it difficult to implement it in actuality. In response, the joint research team of Seoul National University and Soongsil University developed a fairer asset exchange process technology that can distribute the settlement risk when moving assets between two participants by introducing an administrative ledger, and completed a verification experiment.
 
By utilizing the developed model, it is possible to build a safe asset movement system between multiple blockchains, and since the administrative node directly participates in every transaction and tracks them, it may be suitable for multiple CBDC models that pursue an intermediate level between the current system and the decentralized system. In addition, since a lattice-based sequential signature structure is used for the signatures required for asset movement, the possibility of responding to future quantum computer threats was also confirmed.

“This research made it possible to understand the limitations of the existing Hashed Timelock Contract and build a safer cross-chain asset movement system between blockchains that overcome these limitations. We hope that it will become a foundation for organically connecting digital assets for the CBDCs as well as various industries like DeFi (decentralized finance) or the NFT (Non-fungible Token)," said the joint research team.
 
Meanwhile, with the financial support from the Bank of Korea, this study was conducted in collaboration with the Bank of Korea's Computer Information Bureau and was conducted with the support of the National Research Foundation of Korea's leading research center and basic research projects. The study was published online as of October 2021 in 'Information Sciences', an internationally renowned academic journal in the field of information systems.
 
◦ [Title of the research paper and information about the author]
Title: Atomic Cross-Chain Settlement Model for Central Banks Digital Currency
Research Journal: Information Sciences (2021)
Author: Yungyoung Lee (First author), Bumho Son, Huisu Jang, Junyoung Byun, Tae-ho Yoon, Jaewook Lee