Korea’s Second-largest City Pushes for Crypto Hub
To revitalize its aging population, the local government of Busan, South Korea, is aiming to become a global hub for digital assets via the creation of a publicly-run crypto exchange.
Located on Korea’s southern peninsula, the port city, home to about 3.45 million residents, is also aiming to attract a number of blockchain companies and foreign investment, according to a report by Bloomberg on Monday.
With a population of roughly 51.7 million, South Korea has emerged as a leading player in the digital assets arena, with many cryptocurrency exchanges and a high rate of adoption of digital technology and virtual currency among its citizens.
A recent study by blockchain solutions firm TripleA found that nearly 4% of South Koreans, or approximately 2 million people, own some form of cryptocurrency.
That has been partly due to the appeal of cryptocurrencies as a potential means of wealth creation among the country’s youthful demographic, who face high unemployment and inflation.
South Korea’s proclivity for cutting-edge technology and its people’s inclination to adopt innovative advancements have also contributed to the popularity of crypto.
Stateless by nature, digital assets also hold particular appeal for South Korean investors wary of the political climate and the threat posed by its neighbors to the north.
The government has meanwhile taken a proactive approach to regulation, implementing policies aimed at promoting the growth of the industry while also clamping down on what it perceives as predatory behavior from bad actors.
Despite a 2017 ban on initial coin offerings and restrictions relating to registration requirements for service providers, South Korea remains a major player across the digital assets industry.
The recently elected president, Yoon Suk Yeol, who won support from a significant portion of the country’s younger voters through his pro-cryptocurrency stance, pledges to advance policies fully integrating digital assets into the economy.
In line with its national crypto drive, Busan has entered into memorandums of understanding with several of the world’s leading cryptocurrency exchanges, including Binance, in a bid to jointly launch a crypto trading venue by the close of the current year.
Leading officials and planners believe the platform holds the key to helping counteract its proportionally older generation by drawing in a younger crowd.
The exchange also aims to broaden its offerings in the future to encompass security tokens — digital assets that are classified as securities and fall under the jurisdiction of South Korea’s capital markets law.
The government is planning to allow for the issuance of these tokens in the coming year, somewhat reversing its previous stance to ban all ICOs six years ago, per the report.