South Korea has been on the forefront of the blockchain motion, with a few of the highest density of cryptocurrency merchants wherever on the earth. Now, because the frenzy round cryptocurrency costs recedes (Bitcoin is round $7350 proper now, down from a excessive of just about $20,000 final December), the nation is beginning to take into account the extra utilitarian features of blockchain that may not instantly result in riches.
Seoul’s mayor, Park Received-soon, mentioned the town’s plans to launch what is currently being dubbed the S-coin in an interview with CoinDesk. In his imaginative and prescient of this system, the coin might be used for subway fares, in addition to “a fee technique for city-funded welfare packages for public staff, younger job seekers and residents serving to the setting by saving electrical energy, water and fuel.”
That’s a exceptional assertion coming from an workplace that’s extensively thought of to be the second most vital within the nation. It’s additionally a far cry from the strong opposition that national leaders and regulators voiced toward blockchain — and cryptocurrencies specifically — throughout the run up in Bitcoin and Ethereum costs final 12 months, significantly in the wake of a series of Bitcoin heists by North Korea.
Again then, the Korean monetary authorities and the Justice Ministry stated that they were considering outright banning cryptocurrencies. Now, over the previous few weeks, nationwide authorities have quietly floated new proposals round Preliminary Coin Choices (ICOs), probably making a process that would allow ICOs in well-regulated circumstances. Mayor Park additionally stated in his interview with CoinDesk that additional regulation can be crucial round blockchains earlier than any of Seoul’s proposals might be introduced into impact.
The invention of blockchain, and Bitcoin specifically, was seen by many locally as a strategy to “disrupt” politics as traditional, by shifting energy away from central authorities to decentralized gamers. Nonetheless, the expertise more and more appears to be like like it is going to be subsumed by the state to enhance current establishments.
South Korean cities, like counterparts elsewhere world wide, are investigating whether or not blockchain expertise may provide mechanisms like algorithmic zoning. Metropolis governments typically maintain many data of curiosity to blockchain specialists, together with property data, ID data, zoning codes, enterprise and well being licenses, in addition to building permits. Making a clear and environment friendly clearinghouse for such data may generate important positive factors for the standard of city governance.
On this context, it is very important clearly delineate blockchain as database and cryptocurrencies as cash. The proposals from Seoul and elsewhere have been designed across the former. Even when such tokens may present a monetary profit, similar to a reduction on subway fares or housing, these tokens are usually not designed to be fungible currencies in the identical approach that cryptocurrencies are, however as a substitute comfort instruments to offer digital entry to facilities.
That’s in distinction to initiatives just like the one from Venezuela to create an oil-backed cryptocurrency called Petro, which many analysts noticed as a handy means to keep away from U.S.-led sanctions on the Maduro regime. The Trump administration blocked the purchase of Petro last month.
Seoul is predicted to announce a roadmap for blockchain within the coming weeks, and different cities are coming near launching their very own initiatives. The worth bubble in cryptocurrencies could also be receding, however their sensible makes use of might properly drive the following wave of innovation.