KT (Chairman Hwang Chang-kyu) and KT mhows (CEO Cho Hoon) announced that they will develop blockchain-based local currency platform and apply it to Gimpo-si. This project is to be worth about $8.89 million (10 billion KRW).
Gimpo-si, KT, and KT mhows signed an agreement to implement Gimpo-si electronic local currency. This currency can be used as cash at local currency franchises in Gimpo-si starting from the first half of 2019. Although more than 90 kinds of local currencies are issued in South Korea, most of them are distributed as a form of a gift certificate and they do not receive positive responses from consumers that prefer simple payment.
Blockchain-based local currency platform that will be introduced by KT will be a platform that will issue and distribute various local currencies according to their purpose and use.
KT’s ‘Smart Contract’ technology will be applied to this platform. This technology allows currencies that can be coded to be issued and it can apply direct payment service without intermediaries. It also allows credible calculations to take place without leaving any data out and it prevents any double-payment, forgery, and illegal distribution in advance through distributed ledger technology.
Based on this platform, KT is planning to distribute Gimpo-si local currency as a form of a Smartphone application QR code and chargeable prepaid card. This is to consider elderly generations who are not familiar with Smartphones and people who are in their 30s and 40s that have flown into Gimpo-si due to new towns.
QR codes and prepaid cards can be used at all franchises without needing separate payment terminals. KT is expecting that there is a high chance that residents of Gimpo-si and franchises will accommodate this local currency.
This local currency will also be useful for small businesses. For example, a person who received local currency for selling fish at a Gimpo market can immediately receive cash to his or her bank account rather than local currency. This will be the first time when conversion function is applied to blockchain-based local currencies that are currently distributed in South Korea.
It is expected that blockchain-based local currency will actually contribute to economic boom unlike local currencies that are distributed in a form of a gift certificate as it will drastically increase level of convenience for consumers and franchises, transparency of distribution process, and efficiency in operation.
Gimpo-si is planning to pay youth dividend, postnatal care fee, and part of welfare points for government employees, which will be paid starting from next year, with blockchain-based local currency.
Starting with Gimpo-si, KT is planning to expand its blockchain-based local currency platform to 160 local autonomous groups in South Korea. It is planning to introduce various blockchain-based services to improve administrations of local governments such as electronic voting, civic participation, and compensation.
“Blockchain-based local currency platform will provide convenience and transparency and it will be the first successful example that promotes economic boom.” said Director Moon Jung-yong of KT’s Blockchain Commercialization Task Force. “We expect that we will play important roles in implementing blockchain-based local currencies.”
KT has been operating a R&D group for blockchain technology since 2015. It developed network-based blockchain platform that can process 100,000 transactions in one second and it is planning on various services such as finance, data storage, certification, and energy transaction.
Staff Reporter Gil, Jaeshik | osolgil@etnews.com