As China prepares to launch a nationwide digital currency, Seoul in South Korea wants to become one of the world’s first blockchain-based smart cities by releasing its own cryptocurrency called S-Coin. Anthony Pearce reports
According to the mayor of the South Korean capital, Park Won-soon, the S-Coin will be rolled out by November 2019 and will be integrated into the city’s public services, including transport.
According to reports, residents of Seoul will receive S-Coins by partaking in municipal services and being an “active citizen”, including paying taxes and completing public opinion polls.
Announcing the plans to CoinDesk last year, the mayor said: “As Seoul is the world’s leading city in the field of information and communications, including the Fourth Industrial Revolution, I think we should study new technologies such as blockchains.”
He added that “blockchain can be applied to all bureaucratic administrations in Seoul, such as the public transport system operated by Seoul City and the provision of youth allowance”.
Seoul’s point system will be integrated with ZeroPay, a city-government sponsored QR-code-enabled network, which was established last December and allows customers to pay for goods using their phones.
It has been reported that the network will be used for managing part-time workers’ contracts, work history, finances and insurance.
“I’ve met blockchain companies, and I think our companies are not seeing the light because of the various regulations,” Park Won-soon told the site.
“Actually, [the] technology is as advanced as any other country. By creating clusters that will allow blockchain companies to build up, and startups to develop new technologies, we are working to develop and spread blockchain technology around the world.”
The scheme is said to be part of a wider blockchain plan for Seoul, which began in November 2017 when the city of Seoul hired Samsung SDS to help roll out the technology. (If you want to learn more about crypto and blockchain, this article explains Ethereum ERC-20 tokens.)
Park said that S-Coin could be used as a payment method for city-funded welfare programmes for public employees, young job seekers and citizens helping the environment.
He added that laws governing cryptocurrencies would need to be relaxed. “In order to make an S-Coin, we need to prepare institutional and legal support such as bylaws,” he said.
Park said he was looking towards Estonia, which is often described as a digital society. Estonia developed X-Road, its “proprietary decentralised, distributed system” in 2001 and has utilised Blockchain since 2008. The software is also used in Finland, Kyrgyzstan, the Faroe Islands, Iceland and Japan.
According to a report in The New Yorker, in Estonia, “legislation, voting, education, justice, health care, banking, taxes, policing … have been digitally linked across one platform, wiring up the nation.”
The article states: “Today, citizens can vote from their laptops and challenge parking tickets from home. They do so through the ‘once only’ policy, which dictates that no single piece of information should be entered twice. Instead of having to ‘prepare’ a loan application, applicants have their data – income, debt, savings – pulled from elsewhere in the system.
“There’s nothing to fill out in doctors’ waiting rooms, because physicians can access their patients’ medical histories. Estonia’s system is keyed to a chip-ID card that reduces typically onerous, integrative processes – such as doing taxes – to quick work. Apart from transfers of physical property, such as buying a house, all bureaucratic processes can be done online.”
What other destinations are planning to introduce cryptocurrencies?
All this may sound a bit sci-fi but it will soon become the world we live in. Over in Malaysia, new blockchain-based Melaka Straits City plans to ban cash completely.
Backed by the Chinese government, it wants to become a “tourist blockchain-destination of the future” where all services must be paid for with a cryptocurrency called DMI coin. Visitors (the expectation is for three million a year) will be able to convert pounds or dollars, for example, to digital DMI coins when they arrive.
The initiative is expected to increase the country’s tourism revenue from £18 billion to £81 billion by 2030, a four-fold increase.
With a population of just 75,000, the Marshall Islands in the Pacific Ocean also wants to have its own blockchain-based national currency called SOV.
David Paul, the environment minister and minister-in-help to the president of the Republic of the Marshall Islands, recently said: “With the blockchain technology in place, we thought this was an opportune time to establish our own legal tender. As a small country it’s going to be easier and faster for us to make decisions and respond to the market.”
He also said it was an opportunity for the Islands to create its own currency for the first time (at the moment it uses the US dollar).
Most significantly, the People’s Bank of China will soon be releasing its own cryptocurrency in the country’s first special economic zone, in Shenzhen, where it will be tested.
According to The Telegraph, the central bank digital currency (CBDC) “has no physical form like cash, but is backed by the reserves of valuable assets that commercial institutions deposit in the central bank”.
Next year, Facebook is planning to launch a digital currency called Libra, although there is a lot of controversy around it, including talks that it should be banned in Europe. The idea of Libra is to allow people to make payments over Facebook apps such as Messenger and Whatsapp.