South Korea plans to replace physical IDs with blockchain-based IDs by 2024
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(Kitco News) – South Korea is developing a system that will allow citizens to use blockchain-based digital identification instead of traditional physical cards beginning as soon as 2024.
To achieve this, the government has developed a plan that would see digital IDs embedded in citizens’ smartphones via an identification app that would work in the same way as physical citizen registration cards, Bloomberg reported on Sunday.
The new digital IDs are expected to be launched in 2024, and the government plans to have up to 45 million citizens registered with the new technology within two years.
Hwang Seogwon, an economist at Korea’s Science and Technology Policy Institute, highlighted the benefits offered by the new digital ID program, while cautioning that a comprehensive risk assessment must be conducted to ensure that the risks do not overshadow the benefits of such a system.
“Digital IDs can bring enormous economic benefits in finance, health care, taxes, transportation and other areas and can quickly catch on among the Korean population,” Seogwon said. “But there needs to be more risk assessment technologically to make sure the danger doesn’t outweigh the benefits.”
The new program will benefit businesses that have not completed the transition online completely, according to Suh Bo Ram, director general of Korea’s Digital Government Bureau, who said that “All services that have not been able to complete the transition online will now be able to the.”
This could lead to an increase of 60 trillion won ($42 billion) in economic value for the country, or 3% of GDP, over the next decade, according to Ram.
The management consulting firm McKinsey & Co. suggested that a digital ID system has the potential to increase South Korea’s domestic output by up to 13% and cut business costs by trillions of dollars.
This would be achieved thanks to a reduction in wage fraud, time saving on administrative work, expansion of consumer credit, increased trade and the establishment of new markets.
While citizens of some countries have shown more restraint with digital IDs, South Koreans are expected to welcome the new technology with open arms. According to the Washington-based think tank Portulans Institute, Koreans rank No. 1 in the world in enthusiasm and the ability to apply technology in everyday life, business and government.
In August 2020, the country implemented a blockchain-based driver’s license pilot program that saw over one million Koreans ditch physical licenses for digital ones, and in September of the same year, the Korea Internet & Security Agency (KISA) began pilot testing a similar system.
This is a trend that is predicted to see increased adoption on a global scale going forward, according to market research firm ReportLinker. Its June 2021 study estimated that the blockchain identity market will grow an additional $3.58 billion by 2025 – representing a compound annual growth rate of 71%.
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