Here’s why South Korea’s Busan, with over 3 million residents, could become the next blockchain mecca
Busan, South Korea’s second largest city, launched its blockchain project four years ago, intending to attract technology, employment and investment while moving away from reliance on seaborne trade and tourism.
The problem is that the message did not seem to reach the blockchain sector. The city, with a population of 3.3 million people, was designated a special blockchain zone in July 2019 by former President Moon Jae-in. As a result, the city was able to host blockchain initiatives that would otherwise face restrictions and red tape elsewhere in the country, according to a report by South China Morning Post.
South Korean local startup Coinplug is creating a blockchain-based app for public security reporting. In 2020, the city issued B PASS – a blockchain-based mobile app and all-in-one ID and electronic wallet for Busan residents.
Nevertheless, the Busan Chamber of Commerce conducted a poll of 465 blockchain companies in the country in July this year and discovered that more than 48% were unfamiliar with Busan’s position as a blockchain-friendly zone. A further 21% had heard of the initiative but did not know what it achieves in detail.
Busan’s blockchain achievements are underwhelming
According to local media, this lack of interest is evident in the use of B PASS, which has been available for two years but has only had about 10,000 downloads. According to Lee Jang-woo, an assistant professor of global entrepreneurship at Hanyang University in Seoul and a blockchain expert, Busan’s blockchain successes have been overwhelming.
“I anticipated this failure to some extent because only some services and companies using blockchain technology enjoyed the relaxed regulations, while businesses using cryptocurrency were excluded,” Lee said.
He went on to say that South Korea’s unfavorable attitude towards cryptocurrency at the time most likely influenced the approach.
Busan changes strategy
In particular, Busan has changed its approach and entered into agreements with three major cryptocurrency exchanges in the past two months: Binance, FTX and Huobi. The aim is to create the country’s first municipally supported digital asset exchange.
“We want to build a new growth engine for the local economy and turn it into a global digital financial hub,” Park Heong-joon, the mayor of Busan, said at last month’s partnership signing with Binance.
When Busan signed its partnership agreement with Huobi earlier in September, Mayor Park said he hoped the firm “will spread the word about Busan’s strong environment and support for digital finance, so we can attract more blockchain talent to our city.”
He said the city is proposing tax incentives as part of the package to get more blockchain professionals to move there. According to Lee, of Hanyang University, the decision to include cryptocurrencies in the mix makes perfect sense.
“Part of that is building the digital asset exchange. I think so [the city] has now got the right direction and strategy, said Lee.
Global exchanges see South Korea as an attractive market
While Huobi has said it will bring 1,500 blockchain specialists from abroad to Busan, its two partners, Binance and FTX, have stated that they will help establish Busan’s exchange in technology and infrastructure, respectively.
In return, cryptocurrency exchanges saw potential in returning to one of the most attractive cryptocurrency marketplaces, which they had abandoned due to stricter regulations; according to Lee of Hanyang University, “the partnerships fulfill needs on both sides.”
Finally, Huobi announced that it would be the main sponsor of Busan Blockchain Week 2022, which starts on October 27. This meeting has the potential to be an important occasion to determine whether the announcement that Busan is now open to blockchain and cryptocurrency. the business has been effectively communicated.
