Kakao Corp, South Korea’s largest messaging app operator, is to jump into the blockchain business, which is known as a core technology of cryptocurrency. Some market watchers say the company can list its blockchain unit on the stock market by issuing its virtual currencies.
Kakao said on March 5, “We are planning to establish a unit focusing on blockchain technology.”
The company has been already providing a blockchain-based authentication service through its fintech subsidiary “Kakao Pay.” It makes use of the blockchain technology that safely manages data about customers’ personal information and transactions by storing them in many different servers.
In addition, Kakao holds more than a 20 percent stake in Dunamu Inc., a tech company that runs the South Korea's largest cryptocurrency exchange “Upbit,” through its subsidiary.
The domestic information technology (IT) industry expects that Kakao will launch an initial coin offering (ICO) by setting up its blockchain subsidiary. An ICO is a means of raising funds by issuing new cryptocurrencies, just like initial public offering (IPO). Since it is currently illegal to run an ICO based in South Korea, the ICO for Kakao would be located abroad, most likely in Japan, Singapore or Hong Kong. The industry also says Kakao can work with Dunamu as well. Dunamu Chief Executive Officer Song Chi-hyung and Kakao CEO Lee Seok-woo maintain a close relationship.
Kakao’s competitor “Naver Corp.” announced in January that it has established “Line Financial” for financial services in Japan through its subsidiary “Line Corp.” With the partnership with Line’s simple payment service “Line Pay,” Line Financial will operate cryptocurrency exchanges and provide other financial services like loans.