The past few months have seen a flood of stories about South Korea’s recent push for the blockchain industry within its borders. As one of the countries most actively involved in the sector’s regulation and oversight, South Korea has become a leader in terms of embracing the young technology and is instrumental in the crypto industry’s ongoing boom. A recent report that the government has earmarked over $4 billion to invest in a variety of distributed ledgers and administrative applications of blockchain technology only cements that view. Even so, this is not the first news that shows South Korea’s commitment to blockchain, though it does highlight the degree to which the country has dived in.
It is worth wondering, though, what has changed in the relatively short time since the South Korean government announced a ban on ICOs and possible ban on cryptocurrencies as a whole. It isn’t just the backlash that made authorities shift course. In reality, South Korea has never been bearish on the technology, and its ban on ICOs was likely motivated more by the staggering number of scams showing up in the news than fears of the technology itself. Tracing the steps from this negative view to South Korea's later status as a haven for blockchain illuminates the country’s optimism for the technology.
“South Korea’s culture, fast-paced digital affinity and politics make it the ideal combination for adopting an optimistic approach towards blockchain technology. Less of speculation but more of genuine interest in technology and real world adoption is reinforcing the overall motivation within the space,” said John Kirch, Chief Evangelist of Sentinel Protocol.
More than Surface Level Commitment
At first glance, the commitment to invest such a large sum into distributed ledger technology and other innovative tech fields may seem like an abrupt change of heart in South Korea. A little digging, however, shows that this is just the latest in a series of moves by the government to become a true haven for blockchain.
The country already has a reputation as a major player in the world’s tech industry, but 2018 has seen the government turn its attention to the crypto sector. South Korean exchanges like Bitthumb and CoinOne, both of which rank among the top 100 cryptocurrency exchanges by trade volume, have become major hubs for trading.
This comes with the South Korean government's increasingly favorable view of blockchain, which is doing its part to spur business growth. Regulators have been proactive in creating a safer space for cryptos. Officials recently announced that exchanges will be classified as financial institutions (bringing them under the government’s regulatory purview) and have discussed fully lifting the ICO ban.
The government has also revealed the creation of a new office named the Financial Innovation Bureau which will oversee emerging financial technology—including blockchain and cryptocurrency—to create more forward-looking policies and platforms for supporting innovation. The South Korean National Assembly has even discussed plans to create their own “blockchain island”—a special zone for blockchain with more friendly regulations and policies.
Optimism Driven by Innovation
The drive by the government has run parallel to the explosion of innovation the local blockchain sector has seen in the past year. Several major events—many of them sponsored by the government—as well as intriguing projects have caught the eye of industry observers worldwide. These projects have tackled everything from key problems in the industry itself to major corporate pain points.
Sentinel Protocol, for instance, was born from CEO Patrick Kim’s own experience with blockchain-based fraud. The company has released a free Google Chrome extension that lets users validate the ICOs they wish to invest in by, ironically, using the power of blockchain to combat the issues the technology has inherently built in. Sentinel’s hope is to reduce ICO scams and fraud significantly, and lead to a more open and friendly ecosystem.
Others, like ICON, are looking to create a more transparent and efficient blockchain network. The company is already the largest blockchain in Korea and has shown applications in several industries and fields. Lucidity is an interesting US Company backed by some Korean investing with far-reaching potential, as it deals with transparency in the digital advertising and analytics field. The company has recognition worldwide and has even won industry awards for its services.
More important than a startup hub, however, is the establishment of South Korea as a center for conversation and innovation around blockchain—a development highlighted in the several major blockchain events planned and occurring in the country. These also feature some of the most prominent names in several fields surrounding technology.
Block Seoul, for example, an upcoming major blockchain conference, is set to have several high-profile speakers in attendance. Michael Hayden, the former head of the CIA and the NSA, and James Clapper, the Obama administration’s Director of U.S. National Intelligence, are both slated to appear along with several business figures. The inclusion of these two security-oriented names highlights the importance of security and government embrace for blockchain’s future. As governments better understand the true implications of blockchain, the technology should see greater adoption and embrace by regulators.
As recently as July, the country also hosted Korea Blockchain Week, which included several major events and doubled as a gathering of many of the industry’s luminaries. Additionally, the South Korean government has noted that it will continue sponsoring the sector and providing more opportunities to attract new businesses and ideas in the sphere.
Words Backed By Actions
More than just a show, South Korea’s willingness to embrace blockchain seems to be fully backed by the government’s actions and statements. The country has wisely positioned itself at the crest of the blockchain wave, and it is creating policies that will make it a leader in the way governments cooperate with this burgeoning sector. By doing so, Korea has guaranteed that it will continue to hold its place among the world’s most innovative countries, and that it will have an important say in how the world interacts with blockchain.