South Korea to Pilot Blockchain Digital Currency, QR Payments for Civil Servants’ Official Expenses at Six Banks
Summary
- The government said it will push ahead with a pilot program to pay government office operating expenses using blockchain-based digital currency and smartphone QR codes.
- It said a pilot project for treasury fund disbursements using blockchain-based digital currency proposed by six banks, including KB Kookmin, NongHyup, Shinhan, Woori, Industrial Bank of Korea and Hana Bank, had been designated for a regulatory sandbox exemption.
- It said blockchain-based digital currency would process payments and settlements at the same time, lower fees, reduce the cost burden on small merchants, and improve transparency in the execution of treasury funds.
Forecast Trend Report by Period
South Korea will launch a pilot program allowing civil servants to pay official government office expenses, including business promotion costs, with blockchain-based digital currency and smartphone QR codes instead of physical cards.
The Ministry of Science and ICT said on September 22 that it had designated nine projects for regulatory sandbox exemptions at the 45th review committee on new ICT technologies and services, which was held in writing on September 21.
Among them was a pilot project for treasury fund disbursements using blockchain-based digital currency, submitted by six banks: KB Kookmin Bank, NongHyup Bank, Shinhan Bank, Woori Bank, Industrial Bank of Korea and Hana Bank.
Under the National Treasury Funds Management Act, office operating expenses currently must be paid through government purchasing cards or similar methods. The exemption opens the way for related spending, including business promotion expenses, to be paid through smartphone QR codes without physical cards.
Blockchain-based digital currency would allow payment and settlement to be processed simultaneously while lowering fees, easing the cost burden on small merchants. The system could also restrict and manage, within the platform, the types of businesses where business promotion funds may be spent, improving transparency in treasury fund execution.
The committee also approved pilot projects to digitize administrative procedures for urban redevelopment projects. It granted sandbox exemptions to EJM Company for an electronic notice and receipt system for redevelopment projects and for an e-voting and online meeting service for residents’ general meetings held by redevelopment association promotion committees. That would allow procedures ranging from official notices to residents’ meeting resolutions to be handled online.
KT also received an exemption for a mobile electronic notification service using certified electronic document relay technology. Until now, certified electronic document intermediaries had been allowed to distribute only electronic documents created by other parties. Under the exemption, KT will be able to send customers mobile billing statements and other documents it creates directly.
Mediascope’s mobile-linked open karaoke booth, an existing sandbox demonstration project, was converted to a temporary permit. The change followed a determination by the Ministry of Culture, Sports and Tourism that related laws and regulations need to be revised.
Bae Kyung-hoon, deputy prime minister and minister of science and ICT, said the government is expanding the use of digital technology across public administration and everyday life. He added that innovative services should be actively given opportunities for real-world testing so they do not face difficulties entering the market because of existing regulations.
