Korea vaunts leading global brands such as Samsung; is highly developed and innovative; and is investing heavily in artificial intelligence. Do these elements create the right context for blockchain to flourish?
Korea has seen important internet innovations in the late 1990s and mobile after 2010, including world’s first MMORPG (Lineage by NC Soft) and the world’s first SNS (Cyworld).
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There were also many notable firsts in disruptive innovations in fintech and other financial service models, such as cryptocurrency (Adena in Lineage, 1998), QR mobile payment platform (Instapay Inc., 2007), P2P Lending Platform (BaroPayment, 2000), and more.
Korea has been the hub of many valuable innovations, providing the right context for blockchain to flourish. On the flip side, despite active investment in blockchain, the prolonged process, for the purpose of protecting crypto-investors, of legislation and ICO guidelines has caused some uncertainty and difficulties.
The good news is that the central and local governments are actively engaged in creating a good ecosystem for blockchain and its investment.
Cryptocurrencies are dividing nations. While countries such as China and Pakistan have taken a hard stance against the crypto market, Korea and Malta are highly supportive. Do you think the latter will be on the right side of history?
Despite the very contentious nature of this topic, I do believe that history will be on our side. Innovation has always come with the cost of dismantling the existing societal structure, igniting social conflicts and controversies.
Within this context, blockchain and cryptocurrency are pushing against the existing boundaries of centralised financial institutes, political authorities and governments, as well as companies that have profited from the monopoly of information through Google and Facebook.
Those who do not invest their efforts into creating continuous innovation will not survive in the long-term, though they may temporarily profit from the existing centralised system. This is something we have already seen over the past decades. We must never forget that those that resisted against and those that adopted the internet and mobile innovation – have experienced very different results.
While in most countries, investing in cryptocurrencies is still a niche market, in Korea, this has gone mass market, with observers saying that Koreans hold 30 per cent of all cryptocurrency trading. How do you see the market developing?
Cryptocurrency is no longer a niche market in Korea and we can see this from the numbers too. Cryptocurrency transaction has surpassed the existing stock market (KOSDAQ) as early as 2017, and did so by multiples towards the end of last year and early this year.
The Korean market has traditionally been an early adaptor with favorable disposition towards technology innovation. In fact, Korean industry has experienced digital asset transactions such as MMORPG game items and virtual currency Adena in Lineage since two decades ago. The concept of cryptocurrency transactions, therefore, is not all too new to Koreans. Given further development of ICO guidelines and regulatory framework for exchanges, Korea holds great potential for an explosive growth.
What policies has Korea enacted to regulate blockchain, while making its bid as a global blockchain leader?
The Korean government has not taken a clear stance on blockchain and cryptocurrency. Yet the National Assembly and the Democratic Party (the current ruling party) is actively preparing for legislation – in which I am involved as the chairman of Blockchain Governance and Consensus Committee and president of Innovation Ecosystem Legislation Institute.
The market sector, such as crypto companies and investors, has in fact played a more significant role than the government in making Korea a leader in blockchain and cryptocurrency.
Malta is pitching itself as ‘Blockchain Island’. Do you think it has the right elements to make good on this pitch?
Malta has been a pioneer in creating active frameworks for blockchain as the first country to legislate blockchain and cryptocurrency laws, which makes its pitch as ‘Blockchain Island’ perfectly apt. This is obvious from the fact that Binance and Okex, two of world’s top five exchanges, moved to Malta, where financial and investment support system for blockchain and crypto companies are well prepared. Its efforts in creating a framework and fostering growth in blockchain have propelled Malta to the forefront of the industry.
In what ways can Korea and Malta can collaborate within the blockchain field?
Collaboration between Korea and Malta will help Malta in its vision of a true crypto-island. Korea is one of the biggest, if not the biggest, crypto markets, with three million crypto-investors, their total investment marking $30 billion, 10,000+ ICO companies, and over a hundred exchanges, numbers that are still growing.
The planned establishment of Korea-Malta Blockchain, the purpose of which is to foster collaboration between Korean and Maltese companies, and its following various conferences starting December this year will help the two countries first set out the path to a long-term mutually beneficial cooperation.
You were present at the Delta Summit. How would you rate your experience?
Despite it being the first time to be held, the Delta Summit was well-organised and attracted influential figures in the crypto market from all over the world. It provided various venues with great services. While there are some minor improvements that can be made for more effective operation and organisation in the future, overall I enjoyed the experience.
Jaekwang Bae is the president of the Korean Fintech Research Institute and president of the Korean Commission for Blockchain, Cryptocurrency and Innovation.