South Korea is making huge waves in the cryptocurrency and blockchain space yet again, having announced recently that its central bank, the Bank of Korea (BOK), is considering cryptocurrency and blockchain applications for a “cashless society” project.
As reported by local news source TokenPost on 1 May, the BOK had announced the official launch of its cash-free society project in its 2017 Payment Report; the report gives mention of the BOK working with overseas banking institutes to fully explore the viability of blockchain technology and password security to payment systems. It has also created a research organization to analyse cryptocurrency and the potential effect of virtual money on the financial system.
In 2016, the Korea Times reported that the BOK was planning to make the country a “cashless society” by 2020; a central bank survey found that South Koreans carry on average 1.91 credit cards, 2.03 mobile cards, 1.26 check or debit cards.
The survey also highlighted the decline of cash carriers amongst the population and that the central bank issued 12.3% fewer 10,000 Korean won (KRW) banknotes from 2015 to 2016 with smaller denominations also showing dips.
South Korea began officially piloting the project in April 2017 with a “coinless society trial” where customers would deposit small amounts of change from cash transactions onto a prepaid platform such as mobile cards and then use them at various retailers.
One of the main purposes of the project is to increase customer convenience and reduce the costs of physical money production, which in 2016 had cost USD 47 million.
Furthermore, the government plans to utilize the initiative to “open the underground economy” which is largely cash-based. Kwak Hyun-soo, an analyst at Shinhan Investment Corp, said:
“It can open the underground economy, and thus enhance equivalence in taxation. The shoe box full of KRW 50,000 banknotes that you see in movies will disappear in reality [with the advancement of a cashless society].”
A notable advancement was made by a big business in South Korea with the announcement of Starbucks Coffee Korea Co. beginning to trial cashless stores at three of its outlets.
Visions of a crypto-country
In the wake of multiple controversies in South Korea, including ICO bans and crackdowns on exchanges, the world media was convinced that the third largest fiat-to-Bitcoin market in the world was headed into darker days and as a consequence, innovations on cryptocurrencies and blockchain technologies would be stifled if not entirely dismissed.
However, BitcoinNews has reported numerous occasions of South Korea being one of the most forward-thinking nations when it comes to the mass-scale adoption of the technology. Taxation laws, higher qualities of service from leading exchanges and Seoul’s very own cryptocurrency are amongst many of the stories emerging that now seem to perfectly fit in line with goals of the “cashless society” project.