South Korean Telecoms Giant KT Is Reportedly Developing a Local Cryptocurrency

Francisco Memoria

The KT Corporation, a South Korean telecommunications giant, has reportedly been selected to develop a cryptocurrency that’s set to be used in the city of Gimpo in the country, in a test that could see it expand to other local governments.

According to ZDNet Korea, the cryptocurrency will be introduced in April of this year, after a pilot project is run next month. The cryptocurrency, called “K token,” is set to see 11 billion won ($9.7 million) worth of it get issued, and will be usable with local merchants.

The news outlet points out that to pay using the K token, uses will have to scan QR codes, and that merchants who accept payments in the cryptocurrency will be able to request a conversion to fiat that’ll be transferred to their bank accounts, without extra fees.

The head of the blockchain center and KT’s senior vice president Yeong-il Seo was quoted as saying (roughly translated):

Based on the differentiated technology and business competitiveness of the KT blockchain local currency platform, we will successfully carry out [a] local currency business in Gimpo City. The introduction of local currency will contribute to the revitalization of the regional economy.

The company is reportedly planning to expand its cryptocurrency project to other local governments that agree to it, based on its performance in Gimpo. Notably, the KT Corporation has last year ventured into the blockchain sector, as it launched a distributed ledger network that was to be applied to various areas, including ID verification, energy trading, and data roaming.

The move could be seen as a step forward for South Korea, a country that has banned initial coin offerings (ICOs), and that has revealed it’s planning on taxing the fundraising practice if it becomes legal again, as well as cryptocurrencies.

In the country, cryptocurrency exchanges are believed to be vulnerable to hacks, according to a report. This, as only some of the nation’s cryptoasset trading platforms cleared the government’s security checks.

Russia Will Not Legalize Facebook's Libra Says Top Official

A top Moscow official has said that Facebook's planned new cryptocurrency Libra will not be legalized Russia, according to a report this week from Russia's state-run news agency TASS.

Anatoly Aksakov, Chairman of the State Duma Committee on Financial Markets, said Russia would not legalise the Libra stablecoin, due for launch next year, as it may pose a threat to the country's financial system.

No Russian Liberty for Libra

While Aksakov acknowledged Russians would be able to buy Libra on international cryptocurrency exchange platforms, he warned that the creation of any domestic mechanisms of exchange would be limited, or even prohibited.

TASS quoted Aksakov as saying:

With regard to the use of Facebook cryptocurrency as a payment instrument in Russia at this stage - my opinion is that in our country it will be banned.

He added that in Russia there were no plans to adopt legislation that "gives space for active use of crypto-tools created in the framework of open platforms and blockchains" that may pose a threat to Russia's financial system.

International Ministers Speak Out

Aksakov is not the first financial minister to express concerns over Facebook's cryptocurrency plans and their potential to damage sovereign currency markets and financial stability.

On Tuesday, French economy minister Bruno Le Maire, said that global governments must ask Facebook for "guarantees" that Libra will not be aimed as a disruptive force against sovereign currencies.

Facebook's plans have US government and regulatory officials so rattled that a Senate hearing by the Banking, Housing and Urban Affairs Committee has been scheduled for July 16. The government has asked Facebook to halt work on the project until the hearings have been held.

Sherrod Brown, senior Senator for Ohio and the Democratic Party's ranking member of the Senate Banking Committee, said on his Twitter feed on Tuesday: "Facebook is already too big and too powerful, and it has used that power to exploit users’ data without protecting their privacy. We cannot allow Facebook to run a risky new cryptocurrency out of a Swiss bank account without oversight."

While Aksakov has major concerns about the growth of the cryptocurrency sector, Deputy Finance Minister Alexei Moiseev said on Wednesday that the Russian government was set to adopt the country's crypto bill "On Digital Financial Assets" in the next two weeks.