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South Korean Bank, KB Kookmin, Shares Blockchain Strategy

KB Kookmin, a major South Korean bank is planning to adopt blockchain technology into its internal processes.

As reported by South Korean JoongAng Daily on Monday, the institution recently previewed the multitude of benefits to the financial industry that blockchain technology can provide at a conference dubbed the Enterprise Ethereum and Revolution in Banking Summit. Blockchain benefits included the issuance of digital tokens, funding, custodial services and trading.

In his opening address Hur Yin, CEO of KB Kookmin Bank, acknowledged, “The purpose of the financial service is to deliver valuable offerings to clients,” and, “I believe that the financial sector will be able to provide innovative services through blockchain.”

Staying Ahead of the TechLee Woo-yeol, Chief Information Officer, KB Kookmin, also introduced KB’s ongoing experiment in enabling technology to take the lead in providing financial services. He stated, “We see blockchain as a big wave that will disrupt finance in the future, we need to be ready for the moment when different types of assets turn into tokens, although we don’t know when they will be.”

Speaking further on the need to accelerate the adoption of new technologies, Lee emphasized, “The paradigm is shifting in finance.” He continued, “In the past, [companies] were able to catch up with new technologies, but that won’t be the case in the future unless they are prepared for them.”

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Vietnam Favored by Korean Blockchain Companies

Vietnam is witnessing a sea of activities as Korean blockchain firms seek to close business deals and get new sources of revenue. The Southeast Asian nation has emerged to be a reckoning force in the worldwide blockchain spectrum.

Notably, Vietnam has come out as one of the countries recording elevated volumes of cryptocurrency trades and investments. The other nations in this category include Japan, China, United States, Korea, and Russia.

Vietnamese crypto exchanges

In September, NEEO Apps, a Korean firm in the social media platform category, became the first to launch a crypto exchange known as Exvina on the foundation of the Vietnamese dong.

Maeng Jung-ho, NEEO Apps CEO, noted:

“Vietnam’s population is double the population of Korea, and it is a young and active country having a median age of 30 and a 6 percent annual economic growth rate.”

He further acknowledged:

“In addition to our recent opening of a crypto exchange, we plan to pursue various businesses affiliated with our existing social media platform.”

Vietnam-Korean Partnerships

In August, Vin Crypto, a Vietnamese blockchain investment fund, collaborated with Super Alki Foundation, a Korean operator of a blockchain-powered technology and financial platform called Finple.

A Vin Crypto official noted that they entered into this partnership because they were optimistic about the future value and growth of the Finple Platform.

On the other hand, Cho Kang-ho, the Super Alki Foundation CEO, proclaimed:

“We will continue to actively expand in the Southeast Asian market by introducing our payment solutions suitable for the market conditions. We will continue to lead the creation of a new global financial ecosystem by connecting various industries.”

Conversely, Shimex Media, a Vietnamese marketing firm, formed a collaboration with Sigma Chain, a Korean blockchain tech company.

Following this partnership, Shimex Media was mandated with propelling Sigma Chain’s Futurepia blockchain project in the nation through the listing of cryptocurrencies on exchanges, networking, and marketing.

These are some of the notable partnerships made between Korean and Vietnamese companies in the blockchain space.

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South Korea to Pump In a Whopping $12.8 Million into Blockchain Industry

The adoption of blockchain technology is set to reach unprecedented levels in major countries, as recently announced by China’s President Xi Jinping. South Korea intends to follow suit based on the revelation made by the Ministry of Science and ICT that USD 12.8 million will be channeled to blockchain projects in 2020.

This investment strategy seeks to enable South Korea to stamp its authority as a notable blockchain hub across the globe. The ministry has highlighted that the amount will be driven to both private and public sector blockchain projects. Additionally, blockchain experts will be nourished and nurtured through specialized courses nationwide.

Part of the funding will be availed by the Korea Internet and Security Agency (KISA). It is stipulated that at least USD 8.6 million will be set aside to develop and establish several blockchain projects,

On the other hand, the rest will be given to the government-run National IT Industry Promotion Agency (NIPA) to launch a wide range of blockchain-associated courses.

Both KISA and NIPA will be mandated with undertaking intensive research on more blockchain regulations as many South Korean investors, and companies have aired their concerns about the government’s stance on the overall blockchain policy.

As reported by Blockchain.News on Oct 18, Vietnam is witnessing a sea of activities as Korean blockchain firms seek to close business deals and get new sources of revenue. The Southeast Asian nation has emerged to be a reckoning force in the worldwide blockchain spectrum.

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South Korea Intensifies Blockchain in Banking but Rules Out Digital Fiat Currency

Innovation has become decentralized globally, with several countries making significant progress while others have struggled with infrastructure and macroeconomic issues. Several factors like state-of-the-art infrastructure, corporate investment, favorable government’s incentives, and policies, and others affect a country’s perception.

According to MERIC’s new survey, the US continues to dominate in the blockchain innovation landscape by 34%. China becomes the second (26%) as it challenges Europe. The United Kingdom becomes the best in Europe while in Asia, Japan, and South Korea are significant participants in blockchain adoption.

South Korea has ruled out issuing its own digital tokens. The reason for this move is that digital fiats are still far off from what the country wants to be. Meanwhile, the country’s private sector continues intensifying the pace of blockchain in banking.

Now, let’s look at new blockchain paradigms taking shape in South Korea.

South Korea isn’t issuing a digital currency

South Korea’s central bank – the Bank of Korea (BOK) said that it wouldn’t be issuing a digital fiat currency in the near future. The BOK said that there is “almost no need” for digital fiat in the country.

The head of the central bank’s financial service department – Hong Kyung-Sik – mentioned views talked about by other international regulatory bodies that identify that central bank digital currencies (CBDCs) would be most effective in developing countries, and therefore have no place in advanced economies.

He also emphasized that South Korea has an advanced payment and settlement infrastructure like credit card providers and financial settlement networks. Therefore, the country has a broad variety of payment methods available.

Commercial banks embrace blockchain technology

Meanwhile, the South Korea private sector seems to be in too much of a hurry to adopting blockchain-powered solutions in the banking industry.

KT is one of the country’s biggest telecoms. The telecom company has created a smart contract-powered solution and blockchain technology for automated currency exchange tellers, in partnership with a leading commercial bank, IBK. Bellsoft – automated currency exchange machine operator- also is participating in the project.

The parties aim to launch devices next year, and want to install them in shopping malls, hotels, and subway stations across the nation. The machines will provide “preference exchange rates” and will offer 24-hour service. Bellsoft and KT hope that other banks will join the initiative.

The reason for the increased adoption of blockchain among firms is because South Korea softened its stance on cryptocurrency in 2019. Regulators thus adopt more a welcoming approach, which opens the door to potential collaborations between blockchain startups and traditional finance.

Many tech firms like Samsung corporation have adopted blockchain technology. Many big financial institutions have also launched their own cryptocurrencies initiatives.

Banks in the region are creating large blockchain portfolios, with leading banking institutions are making considerable investments in recent months. They are keen to use blockchain technology to speed up transactions and payments and cut costs.

Takeaway

South Korea’s regulatory authorities encourage the adoption of blockchain technology in various sectors. Several firms are already taking advantage of this new technology to drive efficiency and minimize costs. For example, blockchain in banking is on the boom.

But it seems that the regulators have a clear snapshot of how the country should adopt and implement blockchain.

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New Crypto Fraud Scheme In South Korea: What Rules Are in Place to Stop False Advertising?

Corner Up, a crypto platform in South Korea, has had high-ranking staff indicted for multiple cases of fraud in the market.

The Ponzi scheme disguised as a crypto platform managed to acquire over $380 million USD for the CEO and other company staff. Corner Up was promising estimated returns of up to 200% to investors for each investment made.

Targeting many individuals and organizations who are not specialists in the market, the scam company used false marketing and claims of partnership with extremely high profile names, including President of South Korea, Moon Jae-In as an ambassador.

Crypto marketing is certainly an area of concern, with many large companies including Google and Facebook still limiting, or completing baning any advertisement that will ask viewers to invest, save or store assets with any particular company.

Facebook has updated their terms, to ensure that ads should be safe, and that we build for people first. Misleading or deceptive ads have no place on Facebook.

They do however accept that with permission, companies or persons may advertise events, education, and news where no product or services are on offer regarding cryptocurrency.

Around the world, there are many social media networks, search engines and powerful tools to market cryptocurrency. With fraud and countless scams continuing to happen, is there a need for more rules, or more education for the public?

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South Korean Telecom Giant and City Government Teams Up to Launch Major Digital Currency

KT, the largest telecom company in South Korea, is planning to launch its blockchain-based digital currency in the second biggest city in the country, Busan.

According to news outlet dongA, the currency is called Dongbaek Currency, which means Camellia flower, when directly translated to English, and is set to be launched on Dec. 30.

Yoo Yong-gyu, the Blockchain Business Center Director of KT, said, “With our know-how of operating a regional currency and blockchain security, KT will work towards establishing Dongbaek Currency and contributing to the growth of Busan’s economy.”

A contract was secured between KT and the government of Busan in February to develop the digital currency and payment system for local retailers to encourage the adoption of blockchain technology. Yoo explained, “To operate a regional payment network that facilitates hundreds of millions of dollars in transactions, stability and security of the platform are the most important.”

The digital currency is also compatible with Hana Bank and Busan Bank, along with other major banks. When using the digital currency at local stores, existing credit card readers would be used to process the payment.

With Busan’s request to help small stores and merchants, users cannot transact with blockchain-based currencies at department stores and large malls.

KT and Busan are looking to release $260 million worth of Dongbaek Currency, and users will be provided with 6% cashback for using the digital currency.

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South Korean Advocates for Institutionalization of Cryptocurrencies via Bitcoin Derivatives

A South Korean commission dubbed the Fourth Industrial Revolution Commission has proposed that the government ought to permit financial institutions to establish cryptocurrency-based products, such as Bitcoin derivatives.

As reported by Business Korea on Jan. 6, the presence of Bitcoin derivatives will be instrumental in the long-term institutionalization of cryptocurrencies.

The Growth of Digital Finance

Digital finance has emerged to be a critical area for both the blockchain and financial sectors. As a result, the commission has asked the Korean government to follow the footsteps of the US financial authorities by permitting financial companies to release future products on the foundation of Bitcoin prices.

To avoid reliance on foreign custodians in the crypto assets’ process handling, the commission advocated for the development and introduction of a Korean custody solution in the financial industry.

It was also suggested that Bitcoin ought to be listed directly on Korea Exchange (KRX), the nation’s sole securities operator.

The Korean government was also advised to think about initiating cryptocurrency exchange guidelines or business licenses, as well as incorporating crypto-linked products into the financial network.

The commission noted: “As of May 2019, daily crypto-asset trade hit more than 80 trillion won (over $68 billion) in the world, so it is no longer possible to stop crypto-asset trade. […] The Korean government has to gradually allow institutional investors to deal with crypto assets and promote over the counter (OTC) desks dedicated to institutional investors’ trade.”

The development of Korean custody technology was also encouraged.

The commission stated: “Participants in the traditional capital market such as securities firms and banks should develop and introduce domestic custody solutions to handle crypto assets so that the Korean crypto-asset custody market will not depend on foreign countries.”

The Fourth Industrial Revolution Commission was incorporated through a presidential decree in 2017, and it is mandated with the coordination of policy recommendations and initiatives about the development of technological innovations and sciences in South Korea.

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South Korea’s Jeju Island Leverages Blockchain to Curb Depleted Electric Vehicle Batteries

Jeju Island’s government representatives have revealed that a blockchain-powered electric vehicle waste-battery distribution management system has been implemented based on multi-year support. The island is categorized under South Korea’s special self-governing zones.

The blockchain-based management system will track the history of receipts of waste-batteries acquired at the Jeju Technopark Electric Vehicle Battery Industrialization Center opened in June 2019. The information obtained will include details about various releases, classifications, and inspections based on records found on the blockchain.

Blockchain in the electric vehicle industry

The electric vehicle sector is experiencing considerable growth because of benefits, such as reduced fuel costs and lower car emissions. As a result, electric vehicles are offering environmentally friendly solutions based on decreased carbon pollution.

The blockchain-propelled management system intended for the distribution history of electric vehicle batteries was established in December 2019 after receiving a $1 million grant from LG CNS, a subsidiary of LG Corporation offering IT services. It emerged the best among 12 projects, and the Korean government has vowed to support it with a $580,000 grant, as well as a private support matching program.

This pilot project won the hearts of government officials based on its capability of propelling the development of the electric vehicle industry. It is expected to boost the distribution market of energy storage devices (ESS), such as EV batteries, as well as offering the basis for the standardization of battery performance evaluation attributes.

The future strategy director of Jeju Island, Heesop Roh, noted, “Recent national security improvements can be attributed to the 4th industrial revolution and the achievements that Jeju Island has made even within budgetary constraints.”

Through a government pledge of approximately $410 million, the Ministry of Science and ICT is planning a large blockchain R&D project to determine the feasibility of blockchain technology research through 2025.

In 2020, a nation-wide selection of 10 projects will be made to be part of the blockchain-powered electric vehicle waste-battery distribution management program based on its prolonged implementation.

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South Korean Tax Specialists Advocate for Lowered Crypto Taxation

Members of the Korean Tax Policy Association are calling on the government to consider applying a low-level tax on crypto transactions. The South Korean administration is contemplating taxing cryptocurrencies as part of its tax reform plan for 2021, but specialists feel it requires in-depth conceptualization.

The perplexing issue of crypto taxation

The tax experts aired their sentiments during a seminar where they brainstormed and saw it fit for the Korean government to consider introducing a low level of trading tax to act as a precursor to the gradual transfer income tax.

Last month, the administration revealed that it was contemplating categorizing proceeds from crypto transactions as other income, which is subjected to a 20% tax, as is the case with lottery or prize-winnings. This decision was reached because other incomes are usually infrequent, unusual, and considerable in size.

Nevertheless, this proposal seems not to be going down well with tax experts as they stipulated that profits from crypto trading ought to be subjected to transfer income taxation as spelled out in the Income Tax Act, whereby crypto-assets should be included through prior legislation.

The Korea Blockchain Association echoes these sentiments. It asserted, “Still, related laws are still absent, and the taxation infrastructure is still insufficient to cover cryptocurrencies and, as such, some supplements need to be added on the expense calculation side.”

The association feels that the expense calculation improvement ought to begin from crypto acquisition costs as this will open the door to transfer income taxation based on trading tax imposition.

It added, “Acquisition costs need to be clarified for transfer income tax imposition, but cryptocurrency acquisition costs are hard to clarify because the currencies are traded in various exchanges, and related information and data are restricted. Infrastructure needs to be established after case-by-case trading tax imposition.”

Crypto taxation taking shape

As cryptocurrencies continue gaining traction, the issue of taxing them is making airwaves across the globe. For instance, in November 2019, the tax and payments customs authority in the United Kingdom called Her Majesty’s Revenue, and Customs (HMRC) updated its guidelines for crypto taxation pertaining to both businesses and individuals.

A similar trend was noted last month in China after the Shenzhen Taxation Bureau announced the establishment of a new blockchain tax system with Ping An Group.

The South Korean experts, therefore, feel the crypto taxation issue is a tricky one, and this is the reason why thorough consultations are needed.

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South Korea Passes Comprehensive Law Officially Legalizing Cryptocurrency Trading And Holding

A day after India’s Supreme Court lifted the ban on cryptocurrencies, South Korea’s National Assembly followed suit and has amended the Act on Reporting and Use of Specific Financial Information. As reported on March 5, this move fully legalizes cryptocurrencies in South Korea.

Momentous amendment

Following the passage of the amendment by the South Korean Parliament, cryptocurrency holding and trading have finally found their place in the nation’s legal system. It is speculated that this turn of events will usher in a restructuring of the country’s blockchain sector.

After President Jae-in Moon signs the passed amendment, the enactment process will kickstart and is expected to take full effect one year from the date of signing, with a six month grace period to follow for a market adjustment.

Once this time lapses, crypto businesses, such as exchanges, wallet companies, and trusts, will have to adhere to the new rules and regulations. For instance, a real-name verification partnership with an approved local bank will be needed. This will come in handy in averting money laundering as a verified person will be assigned a single bank account where he/she can deposit and withdraw fiat currency to and from an exchange.

The lengthy two-year wait

The landmarking amendment had to wait for two years for it to be passed as it was subjected to thorough deliberations, as well as trial and error procedures. Nevertheless, a happy ending is now in sight as the Korean National Assembly has given cryptocurrencies the greenlight.

South Korea has emerged to be one of the nations setting a precedent in the blockchain/crypto arena. For instance, in October 2019, it revealed that it could pump in a whopping $12.8 million USD into the blockchain industry. Later on, in January 2020, it announced its intentions of a 20% tax on cryptocurrency proceeds.

With cryptocurrencies being validated in South Korea and India, will other nations follow suit?

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