China made headlines in cryptocurrency when it launched its pilot digital yuan (e-CNY) in early 2022. The digital currency works through a mobile app, e-CNY, available on Android and Apple app stores. The pilot program included 23 cities in China, such as Beijing and Shanghai. In South Korea, in 2018, the then-mayor of Seoul, Park Won-soon, announced that he wanted to launch the S-Coin for Seoul’s public services, such as transportation. However, with his sudden death, the launch of the S-Coin has remained on hold. The S-Coin was to be created through a program the Korean government ran with the help of Samsung SDS and ICONLOOP.
The early signs of Seoul launching its digital currency can be seen in the government’s crackdown on illegitimate cryptocurrency businesses in Korea. They are cracking down hard on cryptocurrency being used for money laundering and scams. Korean youth looking towards crypto as alternative investments are the most susceptible to crypto scams. New laws exist for virtual asset providers to register with financial authorities. This is a highly complex process. The Financial Services Commission in Korea has full power to monitor all inflows and outflows of cryptocurrency in Korea. The national tax service can prosecute any suspicious transactions. These could be early steps to weed out other forms of cryptocurrency that could interfere with their digital currency, like the S-Coin or another government-backed coin.
The first stage of the S-Coin will involve processing payments on public transportation like subways and buses. Then later, it will be given to residents living in Seoul who do municipal services. These municipals’ services include participating in public polls and paying their taxes. In addition, the S-Coin could be used as a youth allowance in Seoul. A select group of students from middle and high schools from low-income families will get monthly assistance in the form of S-Coins from the government. The S-Coin can be redeemed at convenience stores all across Seoul.
The S-Coin will be integrated with ZeroPay (Seoul’s sponsored QR-code-enabled network). It allows residents in Seoul to pay for their goods and services using their smartphones. So far, 14 public services will be the first organizations and programs to use S-Coin. These include document administration, labor welfare, and vehicle registration, to name a few.
The former South Korean president, Moon Jae-in, supported Blockchain technologies. Current president Yoon Suk-yeol has also expressed his desire to support blockchain technology. Will this mean we will see the S-Coin finally launched in 2023?
The Seoul government aims to turn Seoul into a Blockchain-based Smart City by the end of 2023. In 2023, citizens in Seoul could use the S-Coin as part of a citizen’s reward system. Their budget to make this a reality is over $100 million. Besides the rewards system, the Seoul Citizens Card will also be improved with Blockchain. Blockchain technology will allow for easy verification for citizens in Seoul who need to use certain public services.
The services include Blockchain for healthcare, authentication of credentials, and making donations as transparent as possible. The Blockchain system will be fully owned by the Korean government but run by the private sector.
Seoul has already launched a Blockchain petition voting system. Residents in Seoul can now make suggestions to the Seoul government about possible changes to existing policies or suggest new policies. Blockchain technology comes in to verify the residents to ensure they are residents of Seoul and prevent duplicate votes. In the past, South Korea allowed its citizens to submit a petition online, and if it got more than 200,000 votes, the Blue House would address it publicly. The Seoul Blockchain petition system will only be for Seoul residents. Therefore only 1,000 votes are required for the Seoul government to respond. Since the system is built on the Blockchain, there will be no issues regarding double voting and false identities.
The S-Coin will only be the start of incorporating Blockchain technologies in the city. Seoul has already partnered with Samsung SDS. Eventually, they will work together to use the S-Coin as a payment method for Seoul’s welfare programs. The end goal is to allow residents in Seoul to vote online. Therefore they can challenge parking tickets from the comfort of their homes. Blockchain technology can make it easier for residents in Seoul to fill out online applications. This will be done by storing their data, such as name, date of birth, bank accounts, etc., on the Blockchain. Seoul is also developing an identity document for the National Blockchain system. This will allow Blockchain startups in Korea to have an infrastructure in place to allow for innovation and growth.
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