South Korean Province to Introduce Cryptocurrencies and Blockchain-Based IDs for Employees

According to local dailies in South Korea, the eastern province of Gyeongsangbuk-do is in line to issue its own cryptocurrency, open an exchange and push for adoption as payment system within the province.

In an effort to replace the local currencies (gift certificates) in the nine cities the government of the Gyeongsangbuk-do province (also called Gyeongbuk) are working on a cryptocurrency that will be used in selected sections of the province.

The government will establish exchanges to trade the cryptocurrency issued. Merchants and retail sellers will be able to accept the currency through smartphone QR codes.

Before the idea of integrating cryptocurrencies, the province of Gyeongbuk have gift certificates that can be used as normal currency within the province. The gift certificates act as local currency within the province in an attempt to boost the economy, reinvestment into the province and preventing local capital flight.

According to Naver, the nine cities across Gyeongbuk province each offers their own gift certificates with a further 60 municipalities across South Korea using them. The practice has seen the various cities flourish economically as a huge part of the population use these gift certificates.

According to one of the local dailies, Kyongbuk newspaper, Pohang is one of the largest cities in Gyeongbuk issuing gift certificates in the province. The city with a population of slightly above half a million registered the highest value in gift certificates offered in South Korea with a total of 100 billion KRW (~$90 million USD) worth of Pohang gift certificates having being sold by the government since the start of January 2017.

However, with blockchain technology offering better security and transparency combined with the increased adoption rates of crypto in the country, the municipal is looking to introduce cryptocurrencies to replace the gift certificates.

The tentative name offered for the cryptocurrency is the native “Gyeongbuk coin”.

Joongang Ilbo, the province’s Science and Technology Policy Department announced on August 27th that a total of 10 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. The first issuance of the 100 billion KRW will be offered in the first half of 2019 and exchanges will be available to trade the coin with payments enabled across various outlets using a QR code on your smartphone.

Korea has been on the forefront in accepting the use of cryptocurrencies and has been ranked one of the friendliest nations towards the blockchain technology. This directive by the Gyeongbuk government to replace gift certificates with cryptocurrencies will improve the efficiency in money transfer, speed, lower fees and offer a transparent platform to transact.

“There are still many issues to be resolved…[such as] notifying merchants of the way they can use [the] coins, creating separate programs and issuing [the] coins (cryptocurrencies).” – Chung Sung-hyun, head of the province’s Science and Technology Policy Department

The Gyeongsangbuk-do officials visited the canton of Zug in Switzerland to benchmark on how they can integrate blockchain technologies and increase adoption of cryptocurrencies across their province. The Swiss city is known as a cryptocurrency startup hub with many companies such as Xapo, Spaceshift, and the Ethereum Foundation setting base in the canton.

A total of 10 officials, including outside experts from Gyeongsangbuk-do province, met with a number of government officials and local business owners to discuss and learn processes involving crypto integration. The meetings held were productive as one official from then South Korean delegation spoke to Sedaily of the idea to introduce blockchain based identity cards to the 5000 provincial government officials similar to employees’ blockchain-based IDs in Zug.

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