Category Archives: South Korea

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Argentina Goes With Bitcoin to Settle Export Deal

Argentina Goes With Bitcoin To Settle Export Deal

Argentina has made history by recently completing an export deal with South American neighbor Paraguay using Bitcoin as payment.

The export of pesticides and fumigation products has set an example for others in the region, showing that cryptocurrency has the potential to act as a credible form of payment at the international trade level as well as between individual users.

Although a small total in terms of export values, still the move is significant, illustrating the simplicity of the process of paying using a cryptocurrency and then converting to local currency. Argentina utilized Bitex – a Latin American financial service provider that supports Bitcoin payments- to facilitate the deal made under the Esporta Simple programme which facilitates small deals of less than USD 15,000.

This was not the first time Bitex crypto project involved the Argentinean Banco Masventas. Last year, the bank had announced the creation of a SWIFT interbank alternative, using Bitex to provide support for BTC transactions.

Paraguay itself has seen some serious activity on the cryptocurrency front since the end of 2018, following a new partnership with local Bitcoin mining equipment manufacturer Bitfury and Commons Foundation, a South Korean peer-to-peer knowledge commons research firm. The project will see the launch of several mining facilities in Paraguay.

Under the project, a remote area of Paraguay close to the borders of Brazil and Argentina is to develop its own crypto mining subculture, thanks to the world’s largest dam, the Itapúa Hydroelectric Dam – the largest operational hydroelectric energy producer in the world.

It appears Itapúa is finally going to create the regeneration many have been calling for as Paraguay’s government has revealed plans to put into action, the “Golden Goose” – a project which will see the construction of five mining centers on 50 square kilometers near the tourist border town of Ciudad del Este.

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South Korea Telecom Company to Launch Local Crypto

KT Corporation, South Korea’s largest telecom company, has been given the contract to launch a local cryptocurrency in Gimpo area.

The report claims that a pilot project will be carried out in the next month. The new digital currency, K Token, will be introduced in April. Tokens worth KRW 11 billion (USD 9.7 million) will be issued per year by the city. Budgets for various development projects and social services will use this.

Only merchants in Gimpo area will be allowed to use the new K Token. Transactions will be done by scanning QR codes. On the merchant’s request, funds will be converted to fiat currency and transferred to their registered bank accounts. No additional fees will be deducted during the process.

Yeong-il Seo, KT’s senior vice president and head of the blockchain center, expressed his views by saying that the development of local cryptocurrency will help in “revitalization of the regional economy”.

KT representatives hope that after successful implementation of cryptocurrency in Gimpo, other local governments will also join the project.

KT is not the only tech giant in South Korea focusing on blockchain technology. Recently, Samsung also announced that it has developed a system to enhanced the speed of transactions through its enterprise blockchain platform. In order to develop fintech infrastructure in Busan, the country’s second largest city by population, the local government signed a Memorandum of Understanding with blockchain company Hyundai Pay.

 

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South Korea’s “Sampo Generation” Find Escape in Crypto Amid Rigid Society

South Korea's

For many of South Korea’s millennials, cryptocurrency has proven the only way to escape the rigors of the country’s social demands.

Many of South Korea’s young are now calling themselves “dirt spoons”, a reference in South Korea to economic and social status, with gold and silver spoons being the best off and dirt spoons being the worst. Older Koreans refer to millennials as the “Sampo Generation” — literally, “three-giving up” generation — due to their rejection of courtship, marriage and family, the three essential elements of traditional South Korean society.

A generation of young South Koreans have sought out cryptocurrencies as a way of avoiding what they see as dead-end jobs and no future, which has created a huge crypto industry in the country as a result. It is an industry which has seen a total of USD 6.8 billion in cryptocurrencies changing hands in January alone, now becoming the world’s third largest market behind the US and Japan.

“There is no true opportunity in South Korea for the average young person,” said Kim Han-gyeol, 23, a part-time software developer for an e-book company. Kim lost money after making a large profit originally by investing in cryptocurrencies before the fall in the market.

“I felt a sense of shame when I lost money on my Bitcoin investments, not once but twice because of my greed to make a fortune in one go,” she said. But, she added, she’ll stick to digital coins. She said, “There is nowhere else to go to recover my losses anyway.”

Success for the young Koreans means a government position or a job at a small group of family-owned conglomerates selling products that South Koreans commonly purchase. Some of these positions even require a university education with only a handful of local institutions available to choose from; these are highly competitive, and often require long waits numbering years in order to secure a place.

With youth unemployment in South Korea running at 10.5% — the highest in Asia — it is not hard to see the attraction of cryptocurrency investment for many of the country’s young and unemployed.

The cryptocurrency industry has caused a huge wave of interest amongst South Korea’s millennials since 2017, and given time may spark the flame of a huge resurgence in East Asia in the coming months and years.

 

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Ripple Initiative Results in $1 Million Windfall for University of Michigan

Ripple Initiative Results in  Million Windfall for University of Michigan

The University of Michigan (UM) in the US is to establish a collaboration through cryptocurrency through Ripple’s University Blockchain Research Initiative (UBRI).

Michigan has joined a number of universities, now numbering 11 in all, who have formed a partnership with Ripple under the scheme aimed at supporting academic research, technical development, and innovation in blockchain, cryptocurrency and digital payments.

UM has announced that it plans to encourage multidisciplinary curricula in fintech through the creation of a center which will also focus on engineering and business use cases for cryptocurrencies in new applications such as smart cities. A statement from the university announced:

“The most important thing this funding allows us to do is integrate the engineering and data science with finance and policy to craft financial models to fund infrastructure, developing models to close the infrastructure finance gap.”

The grant of USD 1 million as part of Ripple’s USD 50 million UBRI, includes some of the world’s most prestigious universities including Princeton University, MIT, and University College London (UCL). Several universities across the US, along with others in South Korea, the Netherlands, Luxembourg, India, Brazil, Cyprus, and Australia are also included in the project, giving the initiative a distinctly international flavor. Last year Ripple contributed USD 50 million as part of the same initiative in South Korea alone, demonstrating the company’s intent to promote more interest in cryptocurrency in that country.

The new center at UM, to be named The Center for Smart Infrastructure Finance, will support interdisciplinary initiatives along with the College of Engineering, Ross School of Business, Ford School of Public Policy, and the College of Literature, Science, and the Arts.

Senior vice president of global operations at Ripple, Eric van Miltenburg, sees such collaborations as a necessary step towards pushing blockchain technology forward. He commented.

“In less than a year, we are already seeing UBRI partners create new cross-disciplinary research programs and courses, as well as collaborate with one another to share ideas on how to grow the blockchain ecosystem,” said van Miltenburg.

 

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Bank of Korea: CBDC Could Threaten Commercial Bank Stability

CBDC Could Threaten Financial Stability of Commercial Banks, Says Bank of Korea

The Bank of Korea (BOK) has said that the introduction of a state-owned and issued digital currency in the form of central bank digital currency (CBDC) in South Korea could possibly zero-out commercial banks, reports Yonhap News Agency.

According to the source, the BOK published a report expressing concerns with low deposits demands into commercial banks that may result from the implementation of a state-backed CBDC into the financial system.

Kwon Oh-ik, one of the co-authors of the report, wrote: “The CBDC is a kind of a BOK-issued bank account. People trust it more than one in a commercial bank”. This implied that as customers are likely to trust the blockchain-based currency type backed by the BOK as opposed to the legacy form of money transfer and handling, this might lead to low liquidity in such commercial banks as customers withdraw their money. This would invariably shoot up interest rates.

Commercial banks are largely dependent on the loan infrastructure and if deposit services reduce, making it hard for the banks to have access to liquid cash for loan maintenance, then interest rates will then go up. Invariably, that may reduce patronage and consequently reduce the businesses of such banks.

Banks around the world have been discussing different application models for blockchain and cryptocurrencies. One such possibility involves CBDC, and talks about facilitating cross-border payment infrastructures. Banks have identified CBDCs as a government type of cryptocurrency which will constitute the exactness of a fiat currency.

At last, one thing some central banks around the world and crypto-enthusiasts could agree on is that a digital asset built on the blockchain could represent a store of value as well as a medium of exchange, and possibly capable of replacing the legacy fiat currency formats.

A CBDC could play a significant role in mass adoption of cryptocurrency. However, as exciting as that may sound for Seoul-based crypto enthusiasts, the South Korean central bank has a differing opinion.

The bank did say last week that it is not rushing into issuing a CBDC even though many financial institutions around the globe are more welcoming to the prospects of the financial instrument. The report published by the bank further reiterates its stance on the subject of CBDC.

 

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Crypto Lender Completing $630 Million in 6 Months says Bitcoin Needs Killer App

Crypto Lender Completing 0 Million in 6 Months says Bitcoin Needs Killer App

Some blockchain firms have survived the so-called crypto winter, although many have been less fortunate but one blockchain-focused company thinks it has at least part of the answer to finding success in a bear market.

Celsius Network, an industry-leading cryptocurrency lending and borrowing platform, was created to leverage cryptocurrencies and blockchain technology to create a community which had the interests of the depositor at its heart, according to its CEO and founder Alex Mashinsky. He says he is achieving this through what he calls MOIP (Money Over Internet Protocol).

Clearly, he has found a successful formula, recording over USD 630 million in cryptocurrency loans in just six months, but he claims that “unbanking” should become a greater focus for depositors who are using the conventional banking system. The company’s approach is similar to the banks in only one aspect; it allows customers to take out loans or deposit coins, but there is a difference, as this banking alternative sees 80% of the income generated given back to the depositor every week. Mashinsky explains:

“When banks make a profit, they give it back to themselves or the shareholders, but nothing goes to the depositor. We are doing exactly what banks are supposed to do, but for the depositor rather than the shareholders.”

Now with over 16,000 registered users from over 100 countries the company claims to have paid Bitcoin (BTC) and Ether (ETH) interest to all its depositors every week since its launch. His hope for BTC is positive with quite a different spin on 2018 blockchain development statistics, arguing:

“And even after being down 80%, Bitcoin still proves to be the best performing digital asset class in the past decade. While 2018 was dominated with the dropping baton, Bitcoin continues to be adopted and new blockchain developers in 2018 have doubled.”

Mashinsky sees the future of Bitcoin in the hands of millennials, citing the swell of interest in South Korea with 90% of the country’s young already becoming cryptocurrency holders. He sees this future aided by the launch of a killer app which would attract the next 100 million people to crypto because, as he argues, “too many speculators have jumped in and there are not enough real users and institutions to get us to the next level of adoption and price”.

 

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Report: Japan, South Korea Playground for Bad Actors in 2018

Report: Japan, South Korea Playground for Bad Actors in 2018

The latest CipherTrace report into cybercrime has revealed that much of the USD 1.7 billion worth of cryptocurrency stolen in 2018 came from the Asian Bitcoin arena of Japan and South Korea.

In the “Cryptocurrency Anti-Money Laundering Report, 2018 Q4”, it is stated that out of the funds either stolen through hack or scams, about USD 950 million came from cyber attacks on Bitcoin exchanges. The remainder came from a range of criminal activity such as ICO exit scams, Ponzi schemes, and mobile phone sim swaps.

Last year started badly in Asia, with Tokyo-based Coincheck’s USD 500 million hack, followed by Bithumb and Zaif then falling foul to hacking. With numbers on the increase, representing a seven-times hike over a period of two years since 2016, the report expresses the need for tighter regulation. Investors in Vietnam also lost about USD 35 million to the Sky Mining scam in 2018, adding to Asia’s woes.

Both South Korea and Japan have since made a concerted effort to tighten security, with both countries now introducing self-regulation. Japan’s cryptocurrency industry self-regulators, the Japan Virtual Currency Exchange Association (JVCEA), was approved by the national Financial Services Agency (FSA) to be officially recognized in its regulatory position late in 2018. This was a direct result of the Coincheck hack of the same year.

South Korea, after its CoinRail hack in June last year, has joined other Asian nations who are currently in the process of regulating their own financial banking strategies regarding blockchain and cryptocurrency in order to protect exchange clients.

The report, in indicating the need for closer regulation, suggested that bone fide operators need to be able to operate untarnished by “bad actors” who are not part of the legitimate cryptocurrency community. The report stated:

“These bad actors are clearly flocking to jurisdictions with weak AML and Know Your Customer (KYC) regimes, because in our Q3 report we published the results of research showing 97% of criminal Bitcoin flows into unregulated cryptocurrency exchanges.”

 

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Bank of Korea Says No Urgent Need for CBDC

Bank of Korea Says No Urgent Need for CBDC

South Korean news agency The Korean Herald reported today that the nation’s central bank has said it has no plans of issuing a digital currency in the near future.

Cryptocurrency has taken center stage in many financial institutions around the globe and has found its way into major economic discussions in recent times, this includes the World Economic Forum held in Davos. However, South Korea’s major financial institution has for now chosen to distance itself from the whole shift to digital currencies.

After research conducted by the Bank of Korea on central bank digital currency (CBDC) regarding the possibility of issuing a cryptocurrency that is backed by the central bank or the government, it concluded that there is no urgent need for such implementation. The report was aimed at gathering legal and social data for the effective implementation of CBDC.

Citing an unnamed bank official, the bank said: “We have no plans to issue any type of CBDC that is available for all people in the near future.” It appears that while plans to issue a CBDC is on hold, the bank will continue to research the space and gather more information such as cost implications and benefits. The bank official further said: “We have to work further on the benefits and costs of CBDC implementation first.”

A number of banks have been considering a CBDC for a while now. Most central banks have come up with reasons why they wouldn’t support such innovation claiming the tech has yet to live up to the hype, however, a few have gone ahead to issue theirs.

Mixed feelings surrounding the concept of a national cryptocurrency have been in play for a while now. The Bank of Thailand wants to use a CBDC for internal bank transactions. Speculations surrounding Iran’s national currency as primarily to evade sanctions from the US. Last month, the US Federal Reserve was of the opinion that implementing a CBDC would be out of naivety. Meanwhile, the Bank of England has over time warmed up to the idea of a CBDC after claiming cryptocurrency had failed as both a store of value and a medium of exchange.

Regardless, one thing is certain, banks are settling for the idea of replacing current banking systems with distributed ledger technology, especially to reduce human error and improve transparency. The possibility of a digital currency from there shouldn’t be quickly dismissed.

 

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South Korean Crypto Exchanges Combine to Tighten AML Security

South Korean Crypto Exchanges Combine to Tighten AML Security

South Korean exchanges Coinone, Corbit, Upbit, and Bithumb have joined in implementing heightened levels of anti-money laundering (AML) security in view of high-level hacks over time.

Despite the country’s high level of regulation, requiring companies offering cryptocurrency products to implement AML security, hackers have proven to find ways of infiltrating some exchanges’ safeguards.

The four exchanges will focus on activities such as voice phishing, pyramid schemes, and other illegal trading activities. A new system will ensure a register of suspicious wallets which may be used for illegal activity.

South Korea’s Yonhap News Agency reported that these four exchanges “…are now able to instantly check any wrongful transactions made at other exchanges and take necessary measures, such as blocking their own related accounts. The cooperative step against money laundering via cryptocurrencies is expected to boost the soundness of the industry and to better protect consumers.”

South Korea enjoys a cryptocurrency system similar to Japan where exchanges cooperate for the betterment of the industry. This was illustrated at the end of 2018 where seven exchanges combined to sign an accord for the “Agreement for the creation of a sound cryptocurrency ecosystem”.

The exchanges, Upbit, Bithumb, Korbit, Coinone, Gopax, Coinplug (Cpdax), and Hanbitco, stated the accord’s aim was to not only to create a healthy ecosystem but also to prevent crime and protect investors by creating a sound ecosystem and preventing money laundering.

Financial Services Commission (FSC) head of financial innovation, Kwon Dae-Young, has declared that the aims of the government are always the same regarding cryptocurrency, maintaining that the integrity of the space is vital:

“We are trying to institutionalize [cryptocurrency exchanges] but before we do, we have to answer the question of how to deal with the damage and tears of many virtual currency investors. We must see if any of the projects that can help the people in their daily lives have been presented. Trust and authenticity are important.”

 

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South Korean District Implements Public Proposal Evaluation on Blockchain

Public Proposal Evaluation

A report from local media outlet Newsis stated that Yeongdeungpo-gu district of South Korea has implemented blockchain technology in its proposal evaluation system to further improve transparency of its administrative processes.

The blockchain-based system is the first of its kind in the region to apply such technology. It will incorporate the immutability and data legitimacy aspects of the blockchain into various public service bidding company selection procedures. The system was said to have won the grand prize last year for an anti-corruption best practices contest.

According to the publication, the evaluation committee commented: “Yeongdeungpo was the first to apply this new technology to the proposal evaluation and it was so good that it was constructed to be easy to use.” It further plans to expand the application of blockchain and the current system built upon it to other local governments.

On many fronts, the crypto and blockchain industry in South Korea continues to gain adoption as numerous use case applications of the blockchain infrastructure continue to emerge in the nation.

Recently, government ministries in South Korea pushed the nation’s blockchain infrastructure to the seas in a new marine logistics project. The Defense Acquisition Program Administration (DAPA) also launched a program through which to offer grants of up to USD 530,000 to develop defense applications based on the 4th industrial revolution technologies.

Moreover, economic policies are also being adjusted to favor the growth of the industry. The government took an initiative to boost the sector by providing a tax incentive for blockchain-related research programs. Meanwhile, cryptocurrency legislation is still being worked out.

 

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