Cryptocurrency To Replace Fiat-Based Transactions In South Korean Province

  • Gyeongsangbuk-do, a South Korean province, is set to issue 100 billion won ($90 million) of its annual gift certificates by using its own cryptocurrency.
  • These certificates have previously been issued using local currencies, in order to boost the province's economy and to discourage the flight of capital. 

 

Gyeongsangbuk-do, a province in southeast South Korea, is reportedly planning to launch its own cryptocurrency. Local news outlet Joongang Daily revealed that the province aims to replace fiat currencies in its nine cities with digital currency-based transactions.

According to local reports, Gyeongsangbuk-do’s cryptocurrency will be used to make payments throughout the province and merchants will be able process these transactions by scanning QR codes from smartphones.

Improving Local Economy, Reducing Capital Flight

In addition to using its own cryptocurrency for monetary transactions, the South Korean province is planning to issue digital currency-based gift certificates. At present, all of the nine cities in Gyeongsangbuk-do, also known as Gyeongbuk, provide their own (separate) fiat-based gift certificates.

Gyeongbuk’s nine cities and 60 other municipalities in South Korea currently issue gift certificates in order to encourage their residents to use local currencies. This is reportedly a government-backed initiative aimed at improving the local economy, while also helping to reduce the flight of capital.

100 Billion Won In Gift Certificates

South Korea’s Kyongbuk news outlet reported that the province’s city of Pohang, which has a population of over half a million, issues the largest number of gift certificates out of all the other cities in Gyeongbuk. Since January of 2016, Pohang has issued over 100 billion won ($90 million) in gift certificates, according to Kyongbuk.

On August 27th, the South Korean province’s Science and Technology Policy Department revealed that,

“10 [local] banks, mobile communication companies, a university research team and government officials of Gyeongsangbuk-do will gather for the first time for the issuance of the cryptocurrency.”

Science and Technology Policy Department

The policy department also said the province’s new digital currency will “tentatively” be called the Gyeongbuk coin. During the first half of 2019, 100 billion won ($90 million) worth of annual gift certificates will be issued using the province’s newly launched cryptocurrency, local news sources noted.

Moreover, the province is preparing to introduce an exchange where residents can easily buy and sell Gyeongbuk coins. As mentioned, these crypto tokens may be used to pay for everyday purchases by scanning QR codes through smartphone payment apps.

Consultations With Switzerland's Crypto Businesses

Gyeongbuk’s crypto initiative is still in its preliminary stages, as head of the Science and Technology Policy Department, Chung Sung-hyun, said,

“There are still many issues to be resolved…[including] notifying merchants of the way they can use [the cryptocurrency], creating separate programs and issuing coins.”

Chung Sung-hyun

Notably, the province had sent a group of researchers to Zug, Switzerland, which is known for launching some of the world’s largest initial coin offerings (ICOs) and is also where established crypto firms such as Xapo, ShapeShift, and the Ethereum Foundation are headquartered.

After several consultations with various crypto companies and government officials in Switzerland, one of Gyeongbuk’s government representatives noted:

“I think we can utilize the experience gained through benchmarking by making the identity cards for 5,000 Gyeongbuk provincial government employees like Zug as blockchain-based digital ID cards.”

Gyeongbuk’s government official

 

Featured Image Credit: "Golden bitcoin and South Korea flag" by "Marco Verch" via Flickr; licensed under "CC BY 2.0"