South Korea: A state relies on the blockchain

The South Korean government has yet to find a common denominator. First it prohibits its officials from trading and owning crypto currencies. Later it bans ICOs in its own country, but does not want to punish the investors. Now the government wants to invest heavily in the research of blockchain projects.

With the “Blockchain Technology Development Strategy” initiative, the Ministry of Information and Communication is strengthening the development and competitiveness of the private sector. Over the next five years, the ministry expects rapid growth in blockchain applications. The government does not want to miss this either. It wants to invest 230 billion won (around 180 million euros) in development and dissemination in order to strengthen South Korea as a business location. The government therefore wants to better understand the technology itself on the one hand and give incentives to the private sector to develop more on the other. The declared goal is to teach this technology to around 10,000 people who are not yet so deeply involved in the matter. The South Korean government expects to see up to 100 new technology companies by 2020.

Bitcoin code to become cashless

South Korea is supporting the Bitcoin code with the equivalent of over half a million euros. Regular competitions are to attract young people to develop creative solutions and implement them on the Bitcoin code Blockchain. In addition, lawyers and scientists in the civil service should understand the blockchain and crypto currencies better so that the government can pass the necessary laws. For many companies, as in many other countries, a concrete legal framework is lacking. In politics and state government, on the other hand, there is usually a lack of specialist knowledge. The South Koreans want to change this quickly.

The project reduces the social costs for the population by eliminating inefficient or superfluous processes, explains the ministry. This will significantly reduce the processing time for official decisions in the future. Both citizens and companies benefit from the time saved in waiting for decisions.

Model projects on the Bitcoin code

Blockchain technology is gaining ground worldwide in two sectors in particular. Logistics and finance companies are relying heavily on the new technology which is not a scam. The many individual transactions and transport routes are predestined for recording on the blockchain. The South Korean government is also relying on blockchain applications for its six model projects. One of these is also intended to improve logistics in the country. In addition, properties are to change owners faster and cheaper via the Bitcoin code Blockchain. Buyers and sellers can digitally sign the documents and send them to their notary and tax consultant. In elections, the technology should ensure fast and transparent counting. The blockchain should also ensure the food quality of meat products. Every step from production through transport to sale is documented on the blockchain. This gives consumers a transparent overview and enables them to better assess the quality of the meat.

In addition, the project also links up with the used car market: Anyone who has ever bought a used car from a stranger knows the unfortunate situation: Is the technology manipulated? Is it an accident car? What is the seller’s driving style? The buyer is not willing to pay the true price because he does not know the actual quality – a classic example of asymmetric information. The seller cannot credibly assure the potential buyer that he has always treated the car with care. A blockchain could record all the values over the life of the car and thus undoubtedly prove them when making a purchase.

The South Korean central bank is also relying heavily on the blockchain for its “cashless population” project. By 2020, coins and banknotes should have largely disappeared from the economic cycle – an ambitious goal. A crypto currency, or at least a combination of fiat and crypto currency, would be a tried and tested means of getting there faster. To achieve this, it is important to first inform the population about the new technologies and take away any concerns they may have.

So far all this sounds like the classic “blockchain instead of crypto” story. Meanwhile, however, the government is also considering slowly loosening the regulation, which has recently been strictly interpreted. South Korea is a comparatively small country that can boast rapid and high technological development. Despite its openness to technological innovation, the government has made z