Could a cashless society be in South Korea’s immediate future? It’s a question that’s led to a lot of confusion over recent years for South Koreans. Local media stations are reporting that The Bank of Korea (BOK,) which is South Korea’s central bank, has announced plans to explore blockchain and cryptocurrencies as potential applications within their project for a cashless, coinless society.
This announcement doesn’t come as a huge surprise since the government of South Korea has been exploring various applications to become a cashless society for some time, none of which have seemed to provide the right methodology or support at the right time. Enter cryptocurrencies now.
About The Cashless Society Pilot
BOK’s cashless society pilot was first announced in their 2017 Payment Report. In the report, BOK details how they plan to possibly apply cryptocurrency, including potentially applying passwords and blockchains to payments.
An organization has been formed by BOK to research digital currencies and the negative and positive effects it might have on the overall South Korean financial system.
Main Goals Of The Cashless Society Pilot
South Korea spent over $47 million (U.S.) producing physical currency in 2016, making lowering the cost of currency production a main priority within the project.
Another main objective of the program is to provide better customer convenience. Mattresses, duffles, and pockets stuffed with cash from underground sales would be all but eliminated by a cryptocurrency system. This leaves such revenues subject to taxation.
Of course, improving customer convenience is also a main objective of the program.
A Confusing Start To A Promising Endgame
South Korea first began considering a cashless society back in 2016. The overall objective was to eliminate cash and coins by 2020. A coinless society trial was launched in 2017, enabling the public to deposit their small change from transactions onto mobile or prepaid cards for later use.
The problem was that the entirety of the government didn’t seem to be on the same page. The public was perplexed at the beginning of the year as the Ministry of Justice sent a very different message when it declared that it would ban trading of cryptocurrency. Petitions from supporters followed suit.
The potential for the ban was officially laid to rest by the Minister of Finance and the Minister of the Office for Government Policy Coordination in February of this year, just months ahead of BOK’s new pilot announcement.
Bithumb, South Korea’s largest cryptocurrency exchange, also announced that they’re pushing for South Korea to adopt digital currency replacement and their plans to re-face their business in a bank-like fashion to better enable customers to utilize cryptocurrencies on a daily basis.