The Bank of Korea is studying possibility of a cashless economy in the country. It will also possibly be using blockchain to lessen costs of printing and distributing physical money.
The Bank of Korea has announced Cash-Free Society pilot project as part of the “2017 Payment Report”. It says that they have been working with overseas banking institutes to explore possibility of applying blockchain technology and password protection to payment systems.
Basically, the bank, according to the report, will create an organization to research cryptocurrencies and analyze what effects they would have on the financial system. However, the bank has already started investigating the possibility of using blockchain for the cash-free system.
With South Korea spending $47 million in creating and issuing physical currency in 2016. The bank is already looking at the possibility of eliminating physical money. However it also saving cost involved in printing and distributing it. The two are the goals of the new project. Further, Bank of Korea is looking at the possibility or eying a goal of the country becoming cash free in 2020. It started studying moving to a cashless society in 2016.
The April 30 report mentions South Korea’s ban of ICOs in September last year but does not mention repeal of the ban. It does, however, say that “US, Switzerland, and China will be accepting and enacting regulation related to cipher money through overseas case studies.”
South Korea has a regulation that bans anonymous crypto trading but ICOs are still not allowed. The fact that it did not ban cryptocurrencies completely brought some hope to thousands of traders and dealers.
The new report came at a time when Korea startups have been holding ICOs in other areas Hong Kong, Singapore, and Switzerland.
Last year, the bank launched a program to allow customers to deposit small change from transactions onto their prepaid debit or phone cards.
Nevertheless, one would expect the country to take some time experimenting and piloting a project on cashless economy powered by crypto if it ever materializes. There would be many benefits of a cashless society. Including possibility of driving out underground economy according to a Shinhan Investment Corp. analyst. He said that “the shoe box full of 50,000 won banknotes that you see in movies will disappear in reality”, come cashless economy.
The news of a country implementing a cashless economy to embrace digital currency. Since it would open a can of blessings for crypto community because it would signify global acceptance. However, it might also mean that South Korea want to promote only its own national cryptocurrency through a regulation. Thus uncertainty would surround the presence of other cryptocurrencies and their success — which might not be so very good news.
Nevertheless, it will not be the first country to consider a national cryptocurrency. Because others such as Sweden are already working on similar programs. But for Korea because it is a major cryptocurrency market, things would be a little bit different.