Municipal digital currency boom in Korea proves big boon for blockchain industry
Municipal digital currency boom in Korea proves big boon for blockchain industry
  • Jason Kang
  • 승인 2019.01.07 09:23
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Municipalities in Korea- provincial, city and county governments - are at the forefront of the country’s drive to make blockchain and cryptocurrency technologies inevitable parts of people’s daily life, as the country’s blockchain industry is scrambling to explore various use cases of  the distributed ledger technology.

Their focus on the two new disruptive technologies is to boost up their regional economies by encouraging residents and citizens living in their regions to spend more of their disposable income in the region than out of the communities.

Their idea is to prompt residents and citizens in the region to buy goods, or daily necessities like food in the regoin's shops or restaurants and then pay the bills with so-called municipal currencies which the local governments will issue in the form of digital assets like e-coupons, e-gift vouchers, and mobile gift certificates.

As the municipal currencies are just convertible only in the regions, that is the sure way to ensure them to spend more of their disposable income in their living areas.

According to industry sources and government officials, a growing number of municipal governments have been charting out their plan to issue their own municipal currencies using the blockchain and cryptocurrency technologies.

About 17 local governments and countiy authorities are confirmed by thebchain to have their own active plan to issue municipal currencies like coupons, gift certificates, and mobile vouchers to enable residents to use them as an alternative to credit cards and cash in the region to buy commodities and daily necessities.

A case in point is Gyeonggi Province. The governor Lee Jae Myung was confirmed to give a green-light to a bill, which will provide a legal groundwork for the issuance of the municipal currencies. According to the bill, the governor are required to encourage the use and adoption of municipal currencies not only to boost regional economies, but also help promote mom and pop businesses’. 

The bill also calls for the provincial government to issue regional currencies starting from this year.

Other cities and counties in charge include capital Seoul’s satellite cities Goyang City and Gwacheon City, Euijeongbu City, Jinan Country in Jeolabuk Province, just to name 4.

Most of the 17 local governments and county ahthorities will circulate their municipal currencies in digital assets using blockchain technologies. That's good news for domestic blockchain and crytocurrency software builders who has been desperate for profitable and sensible use cases for blockchain technologies.

For example, domestic blockchain and mobile payment solution builder Glosfer had worked together Nowon county authorities to help build Nowon municipal currency issuance and circulation system around its blockchain platform.

LG Group's SI or system integration subsidiary LG CNS has also signed a deal in June 2018 with Korea Minting, Security Printing, and ID Card Operating Corp. to develop a blockchain platform for municipal currency issuance and document authorization and certification services.

The country's largest telecommunications carrier KT, Gimpo City and KT M-House had built a municipal currency issuance and circulation platform around a blockchain solution .

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