South Korea plays a crucial role in the cryptocurrency industry. Whereas most people look to the US for guidance, South Korea is the region more people should focus their attention on. Especially now that the country has its own “crypto region” where guidelines and regulations are less stringent. It is the second major country to take this approach, as Switzerland launches its initiative a while ago.
The South Korean Zug
Most cryptocurrency enthusiasts are familiar with the Zug region in Switzerland. It is a part of the country where cryptocurrency and blockchain projects are welcomed with open arms, rather than shunned or barred completely. So far, this initiative has been mildly successful, although it is only a small step toward elevating the industry to a new level. It now appears South Korea has a similar project, located in the Busan area.
As part of this new initiative, cryptocurrency companies and service providers in Busan will be free from regulatory measures imposed by the government. Busan is the second-largest city in the country – in terms of population – thus it can be a great testing ground for blockchain and cryptocurrency innovation. International companies are not welcome as of yet, although that situation may come to change depending on the success of this initiative.
Focusing on Several Pillars
Rather than creating a “Wild West” for cryptocurrency companies, the South Korean Ministry of SMEs and Startups has unveiled a dedicated plan. All companies focusing on blockchain technology to be exempt from regulation will be active in the public safety, finance, or tourism sectors. This means the impact of cryptocurrencies in Busan will be fairly minimal, as the technology seems to be of greater interest compared to new payment methods for goods and services.
Considering how nearly a dozen regulatory measures have been lifted in this region, there are a lot of potential use cases to explore. If the expected investments begin pouring into the Busan blockchain project, a lot of intriguing developments can be developed. Only time will tell if these projects are commercially viable in some way, as there is no official indication as to what will be developed in the years to come.
Local Support is Crucial
Any project launched on such a grand scale can only succeed if there is sufficient local support. So far, BNK Busan Bank has been confirmed as the supervisor of blockchain management in the financial sector. Hyundai Pay will keep tabs on blockchain-related developments in the tourism segment, which shows the South Korean government is very serious about this new regulation-free zone.
Other companies and agencies in South Korea will play their role as well. That list includes Coinplug, which is a prominent blockchain company in the country. As many external parties will lend a hand wherever they can, there is a genuine chance the technology underpinning all major cryptocurrencies will begin making inroads in this part of Asia.
ICOs Remain Illegal
Despite this seemingly “lax” regulatory touch in Busan, some key restrictions will remain in place. Anyone looking to organize an initial coin offering – or ICO – will still meet the same roadblocks as the rest of the country. This entire project is all about putting blockchain first and not messing around with cryptocurrencies too much. A stablecoin of sorts may be created to reward participants, but further details regarding that aspect have yet to be officially confirmed.
Disclaimer: This is not trading or investment advice. The above article is for entertainment and education purposes only. Please do your own research before purchasing or investing into any cryptocurrency or digital currency.