The cryptocurrency wave is expanding by the day. As much as cryptocurrency and blockchain has brought controversy, people now understand it much better in terms of how it works and how it focuses on offering convenience in trade. Based on this, the South Korean government is angling towards making use of this digital asset to help do away with coins completely.
Using Blockchain for Passwords and Payments
Through cryptocurrency, South Korea, through its Central Bank, the Bank of Korea (BOK) hopes to create a cashless society if its recent announcement on May 1st is anything to go by. According to Tokenpost, a local news channel BOK made an announcement about this concept in its “2017 payment Report”. The report intimated that the bank was in the process of exploring possible ways through which cryptocurrency and blockchain could be used, and this included applying blockchain to payments and passwords.
The bank is also on a mission to do even further research on cryptocurrency. As such, it has formed an organization that will research and analyze the possible impacts of cryptographic assets on the financial system as a whole. With this, the banks hope that they can find a way to increase customer convenience by reducing the need for them to hold physical money. They can instead depend on crypto as a method of payment for goods and services. Reportedly, South Korea is believed to have spent KRW 53.7 bln ($47 mln) in 2016 on issuing physical currency.
Revolutionizing the Cash-Driven Underground Economy
The government also hopes to take advantage of this initiative to help change the underground economy that has hitherto been cash-driven. Kwak Hyun-soo an analyst at Shinha Investment Corp was quick to talk his mind on the same:
It can open the underground economy, and thus enhance equivalence in taxation. The shoe box full of 50,000 won banknotes that you see in movies will disappear in reality (with the advancement of a cashless society).
It should be noted, however, that the Korean government had previously laid out plans to phase out the use of physical money as early as 2016 according to Korea Times. With this plan, the government hopes to become completely cash-free by 2020. In fact, the BOK showed its seriousness in April 2017 when it launched a coinless society trial whereby customers would make deposits of small change from transactions and put them on mobiles or prepaid cards for use at discount convenience stores and department stores.
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