The Korean government has designated Busan, Korea’s second most populous city and its largest port, as a regulation-free zone for blockchain technology.
Sort of.
Speaking in Busan on July 24, President Moon Jae-in called regulatory innovation a matter of survival in the era of the Fourth Industrial Revolution. Referring to blockchain specifically, Moon said inalterable blockchain technology would be applied in Busan to sectors such as tourism, finance and logistics. He said if usage proves blockchain can protect personal data, the city could take an international lead in use of the technology. He also said linking blockchain technology to local financial infrastructure would help vitalize the regional economy.
The Ministry of SMEs and Startups, the body overseeing the project, said blockchain would be used to create digital regional currencies, to manage seafood sourcing and to improve tourism and finance. It plans to spend KRW 29.9 billion on the project through next year.
The Korea Herald’s The Investor looks at who will lead some of the local projects:
“BNK Busan Bank, the banking unit of Busan-based BNK Financial Group, will take charge of blockchain applications in finance. Hyundai Pay, a blockchain-focused fintech startup, and Korea Tour Pass, which provides discounts for travelers, will work on tourism based on the new technology.
Coinplug, which owns a crypto exchange here, will develop a blockchain-based public safety platform and BP&Solution, and Busan Techno Park will work on a logistics platform.”
The government hopes to see some KRW 89.5 billion in additional production and create 681 new jobs in Busan’s blockchain zone. It also hopes to draw to — or create in — the zone 250 companies.
Alas, there’s a catch. The regulatory exemptions in Busan will not cover cryptocurrency. Reports The Investor:
“To the disappointment of crypto firms, however, asset tokenization and initial coin offerings will still not be allowed in the regulation-free zone.
Experts said this limit would make it difficult to attract blockchain companies that set up their businesses in crypto-friendly countries like Japan, Singapore and Switzerland.”
An exception to Busan’s cryptocurrency caveat is Busan’s digital regional currency, the issue of which will be permitted since the currency has been categorized as an electronic prepayment method. CoinDesk Korea notes that Busan’s vice mayor for economic affairs, Yoo Jae-soo, had said before that the city’s ultimate goal was to create in Busan a comprehensive ecology for digital assets — including ICOs and STOs — once Koreans come to believe they can control virtual currencies.
Also in the Korea blockchain space…
(In TokenPost, July 29)
According to IAM, a platform for intellectual property business, South Korea has a 54 percent rate of blockchain patents being granted, tops in the world. Japan was at second with just 17 percent and the U.S. third at 16 percent. The TokenPost cautions that this isn’t the whole story, though — a linked Cointelegraph report notes that China and the U.S. lead actual innovations in distributed ledger technology.
(By Lee Kyung-min, Korea Times, July 28)
The Korea Times looks at the Korean financial sector’s efforts to introduce blockchain-based services to enhance customer convenience and quality. There are a lot of them.
(By Ledger Insights, July 25)
KT has announced a partnership with Nongshim Data System to build blockchain-based food safety platform to bring greater transparency to the supply chain. The project will be launched in the second half of the year. Supply chain transparency projects are one of blockchain’s major use cases.
(By Kim Jin-bae, Block Media, July 26)
The Korea Blockchain Association and the global enterprise blockchain consortium R3 have agreed to build a system of comprehensive personnel exchanges and business cooperation to construct a healthy blockchain ecosystem. Operating on Corda, R3 brings together about 200 major financial institutions and government bodies, including Citi, Barclays and HM Land Registry.
(Yonhap News, July 29)
The Defense Acquisition Program Administration — the government body that handles Korea’s purchases of weapon systems — has joined hands with the Agency for Defense Development, Defense Agency for Technology and Quality and Korea Defense Industry Association to build a blockchain platform to support defense projects. The platform would be used to manage the process of defense acquisitions, from initial bid to evaluation results.
