Korean Government to Invest in Blockchain Technologies

Cryptocurrency Still Strong Despite Bear Market

The world is still waiting on the news of the Korean government in regards to regulation of blockchain technologies and cryptocurrency guidelines.  The wait is longer than expected but many experts feel that it will only be a matter of time before sets these standards.  This could mean the return of ICOs in Korea.  However, more importantly, it seems the Korean government is set on dedicating themselves to the development of blockchain technologies.  It was announced recently that the South Korean government will be investing $880 million next year in blockchain technologies.

The Korean government looked at blockchain/cryptocurrencies initially with some skepticism.  It was such a new technology that the Korean government was not able to control it.  This is why they banned ICOs and cracked down on exchanges.  From the outside, it looked like Korea was not a place where blockchain startups and digital currencies were welcomed.  However, we have seen the Korean startup ecosystem turn into the Korean blockchain ecosystem over the last few years.  It was clear that the interest in blockchain in Korea has grown rather than slowed down.

A Trillion Dollar Investment into Blockchain Technologies

Prime Minister Kim Dong Yeon addressed the administration’s investment plan for innovation and growth over the next five years.  Investing a trillion won in 2019 is huge news for the Korean blockchain community.  The investment is not only for blockchain technologies.  The investment will also go to big data, and A.I.  Over the 5 years, they are looking to invest at least $8 billion.

“focus on promoting big data and AI, developing blockchain technology to ensure data management security and boosting the sharing economy,” said Kim Dong Yeon

This news comes when the crypto market is down across the board.  However, despite the bear market, the cryptocurrency/blockchain industry in Korea is optimistic.  Most are waiting on the Korean government’s regulations and guidelines.  When this happens, investors in Korea and blockchain startups know that global companies and investors will flood into the Korean market.  This is why so many global companies have been coming to Seoul this year.  They want to have one foot in the door once news breaks regarding Korea’s regulations and guidelines for cryptocurrencies.

As cryptocurrency becomes less volatile and bad ICO projects get vetted out, it is only a matter of time before there is a crypto industry in Korea that fosters innovation and growth.  The Korean government has been making efforts to put in practical regulatory frameworks for cryptocurrency and blockchain companies.  Korean banks also have embraced cryptocurrencies.  These banks have looked to find ways to incorporate them into their service.

Korean Government Crypto Guidelines Coming Soon

The Financial Services Commission (FSC) has legitimized the crypto industry by recognizing them as regulated financial institutions.  When the cryptocurrency and blockchain bill is passed by the Korean government, all crypto exchanges will need to comply with the same security, internal management, and anti-money laundering policies of Korean banks and financial institutions.  There are even talks of exchanges requiring insurance for their crypto holdings.  This is in case clients funds are hacked.  Protecting the Korean public is their main concern.  Therefore, this insurance will go a long way in protecting investors big and small.

The support from the Korean government will not just go to Seoul.  Busan is looking to become the Silicon Valley of Crypto, “Crypto Valley”.  They are looking to bring in cryptocurrency exchanges, startups, developers, and engineers.  In addition, Jeju Island which has the authority to operate outside of the federal government intends to make Jeju a haven for cryptocurrency and blockchain businesses.  So this is not just Seoul, but all of Korea that wants to embrace blockchain technologies.

Why Korea Needs to Embrace Blockchain Technologies

Korea understands the technological revolution that is coming.  The internet changed the way we communicate with one another and how we get information.  Countries that took the lead in regards to internet technology have grown rapidly.  Countries are always competing against each other to find the next great new technology and it is becoming clear that blockchain is that next technology.

Blockchain technologies can improve the relationship between the government and citizens.  Public services will be streamlined.  The government will function much quicker, especially in regards to contract management.  Blockchain has evolved to not just hold financial transactions but any kind of information.  These days blockchain is being incorporated with other technologies such as A.I. and machine learning.  This is to get the best result possible.  Therefore so many businesses, corporations, and startups are heavily invested in researching blockchain technologies.  However, the true game changers will be the governments.  Once Korea incorporates blockchain and smart contracts to improve government operations, it will lead to the improvement of the public sector.

The Future of Blockchain in Korea

The Korean government will continue to invest in blockchain technologies.  So will investors and other financial institutions.  This will cause a snowball effect as most or all companies will need to incorporate blockchain technologies if they want to work with the Korean government.  This will most likely lead to a Korean government blockchain network that will facilitate transactions.  Whether it is in real estate, incorporating a business, or paying taxes, by removing the middleman, the days of long lines and paperwork will be of the past.

Imagine Korea where Koreans can access their health records instantly.  Vote on the internet and make payments instantly.  The possibilities are endless.  In the next 5 years, South Korea aims to be the crypto hub of not only Asia but of the world.  This amount of funding is going to make South Korea a real player and a country to be reckoned with.

John Yoon

John Yoon is the Editor in Chief at Startup Radar, Organizer for Startup Festival 2017, Head of Operations Korea at EOS Asia and the Global Marketing Director for Foresting.io. Email = john@startupradar.asia if you are interested in guest contributing and helping the Korean startup ecosystem. Wechat, Kakao, and Line user ID is jswy315

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