South Korea’s second major city, Busan, is reportedly looking to launch its own cryptocurrency token. Busan is increasingly becoming a hub for cryptocurrency and blockchain technology adoption in a country where the industry appears to be thriving even under strict regulations.
The city also joins others across the globe looking to create their own tokens in the hope of leveraging the increasing adoption of virtual currencies around the world.
Reviving the Local Economy with Cryptocurrency
According to ETnews – a South Korean technology-focused media outlet, Busan is set to launch a cryptocurrency token for use within the city. Busan follows capital city Seoul in drawing up such a proposal.
Details revealed by ETnews show that the token will be a stablecoin cryptocurrency pegged to South Korea won (the country’s fiat). The circulating supply of the token will also be based on the reserves held in the BNK Busan bank account.
The cryptocurrency project is in conjunction with BNK Financial Group via its subsidiary – BNK Busan Bank. The city will also have the backing of the government as promised in April 2019.
City officials will be hoping that the new token will act a trigger to spur greater economic activity in Busan. There were no further details as to the actual utility of the proposed token but similar projects usually involved payment of utilities and retail spending to mention a few.
Other cities like Belfast, Dubai, and Liverpool have also either announced plans to introduce their own local crypto or have actually gone ahead to create bespoke blockchain-based tokens for use within their respective cities.
Busan Becoming South Korea’s Blockchain Hub
News of the proposed cryptocurrency token comes even as the city establishes itself as the de facto center for cryptocurrency and blockchain technology adoption in South Korea. Back in April 2019, the city beat off stiff competition from the Jeju Islands to become the chosen location for the country’s regulation-free zone.
The idea behind the initiative is to create a conducive environment for blockchain innovation without restrictive government oversight. By so doing, South Korean officials hope Busan will be able to rise to the level of places like Zug in Switzerland and Malta.
One of the major points of interest in a regulation-free zone would be the ability to carry out initial coin offerings (ICOs) which remains banned in the rest of the country. Busan could also serve as an operational sandbox for blockchain development before being launched to the rest of the country.
The Allure of Crypto and Blockchain in South Korea
As reported by Blockonomi in 2018, South Korea, along with Malta, Singapore, Estonia, and Switzerland are among some of the top nations in the world based on cryptocurrency and blockchain technology adoption. For South Korea, the increasing penetration of emerging technology is only a chapter in the deeply tech-savvy state.
This thriving industry is despite the government’s strict stance on digital currencies. While not as negative as the policies enacted in China, South Korea’s government has taken hard-line stances on perceived negative aspects of the crypto landscape including anonymous trading and ICOs.
In recent times, it appears that businesses and regulators have begun to reach a common ground. In mid-June 2019, Blockonomi reported that Bithumb and a few other platforms have agreed to bear the full responsibility for any customer losses regardless of whether they happened because of cyber attacks or system downtimes.
Such a policy appears imperative for exchanges in the country given the reported attack from state-sponsored hacking syndicates based in neighboring North Korea. Cybersecurity experts say Pyongyang is funneling the proceeds of these clandestine crypto exchange hacks into its nuclear weapons program.