[Delio] South Korea’s Busan city as blockchain hub? Five blockchain pilots with over $100M fund | Exclusive Korean crypto market insights
Since the launch of the first blockchain labeled Bitcoin in 2009, the technology has rapidly expanded its influence across modern society. Numerous cutting-edge blockchain innovations, including smart contracts, zero-knowledge proof, and fee-free systems, have been developed within the first eight years of the technology’s inception.
Korea has now emerged as of the most enthusiastic and prominent blockchain players in the world following the notable phenomena of the “crypto-frenzy” starting in 2017.
Asia’s fourth-largest economy’s digital asset market has been booming for the past year, with Koreans investing a total of KRW 52.8 trillion ($43.6 billion) in crypto according to the accumulative size from five major crypto exchanges, Upbit, Bithumb, Coinone, Korbit, and Gopax.
The last week, Busan, Korea’s second-largest city, announced plans to integrate blockchain technology into the faces of countries’ services and create the first city-run crypto exchange.
With the above in mind, it has been a progressive period for Korea in terms of the blockchain ecosystem. Let’s discuss some of the initiatives and progress made around the blockchain in South Korea and how far the industry aims to go.
Hell-bent on being a blockchain hub: regulations free Busan
The city of Busan in South Korea is adamant about becoming a blockchain powerhouse.
Busan was the first to establish a blockchain technology innovation in Korea as well as blockchain-related events, including Korea Blockchain Week, Busan Blockchain Week, seminar, and educational programs, are consistently held to enhance the fast-moving industry.
Interestingly enough, in 2022, Busan was given a status of a blockchain-friendly zone.
An even more interesting fact is that the government’s efforts and financial institutions have made blockchain innovation in Busan an irreversible standard.
On August 26, 2022, Binance, the world’s largest cryptocurrency exchange by trading volume, signed a Memorandum of Understanding (MoU) with Busan aiming for South Korea’s digital assets industry expansion and support blockchain-related research and investments in the city.
With the help of Binance, the local government will fundraise over $100 million for Busan blockchain companies’ development in the next three years. Five out of six venture capital firms participating in business agreements directly invest in Busan blockchain companies by attracting foreign capital.
Diving into the details, blockchain technology in all parts of government service is part of Busan’s role as the “hub of a global digital information ecosystem,” as described in official literature.
The improvement of blockchain innovation in the city has prompted the incorporation of the following blockchain-based administrations:
- B Pass — Blockchain-based ID service
- Busan Digital Voucher
- Citizen Safety Report
- B-Fresh — Seafood logistics service
- B-Tour — Travel Platform
B Pass, the most popular service among others, is a centralized platform based on DID, that provides non-face-to-face authentication for public and private services, including Busan Citizen Card, Mobile Family Love Card, Library Membership Card, Digital Voucher, and B Tour, among others. The B Pass app also allows users to examine their COVID-19 vaccine certification and submit a QR code for COVID-19 vaccination certification, in addition to significant electronic certifications.
New future of South Korea’s E-commerce
E-commerce transactions include parties that an administration is unaware of. Despite the fact that consumer products purchased online account for a very modest percentage of total imports in terms of value, Customs is focused on preventing the entry of illegal substances and other forbidden commodities. Given the poor quality of data available from these transactions, evaluating risk faced significant limitations.
In accordance with the terms of the Free Trade Agreement (FTA) signed between Korea and the US, Korea has simplified Customs procedures for low-value goods. The new application system uses “smart contracts” to manage transactions involving the list-clearing procedure; if the requirements for the operation are met, the necessary data is gathered automatically.
Busan on the path to become a blockchain hub
The local government and the now-bankrupt digital asset exchange FTX began cooperation in August. To support blockchain development, the collaboration aimed to establish a local digital asset exchange aiming to become a center for Asian digital assets.
Although the city is now reconsidering its alliance with FTX in light of the collapse of the cryptocurrency exchange, it has not backed out on its blockchain initiatives.
Moreover, the KCS is assisting international efforts to investigate how the technology might be used in workplace contexts by executing various blockchain pilot projects. Indeed, the local government is certain that these initiatives will help it realize long-desired international norms in international trade and logistics and alter the playing field for customs administrations.