A New Business Model That Can Be Exported

KT and Gimpo City are working on a blockchain-based community currency, which is expected to be issued from early next year.

KT, which set up a blockchain research arm three years ago, is planning to launch a community currency service based on blockchain technology, in cooperation with Gimpo City. 

The company and Gimpo City announced on September 17 that a platform for the service will be established before the end of this year. After the platform establishment, a community currency worth 10 billion won (US$9 million) will be issued in the form of e-currency in the region from early next year. At present, KT is working on the same system with 25 local governments.
 

Such blockchain-based community currencies are free from concerns over outflow to other regions and can contribute to regional budget management optimization. “Offline community currencies have been issued for people’s welfare and regional economies, but some local residents have exchanged them with cash or misused them for liquor purchase and so on, causing taxpayers’ money to be hidden in the underground economy,” said a lawmaker, adding, “Online community currencies, however, can be managed in a transparent way in terms of distribution and payment.”

This new type of currency is very convenient to use, too. This is because it can be stored in a mobile device such as a smartphone and can be used anytime and anywhere. Especially, KT’s community currency is convertible. In other words, merchants can convert their community currency received from customers into cash online and immediately. KT explained that the conversion service will be limited to merchants in the city.

The community currency business is for the public good rather than profits, and KT is planning on low fees in this regard. KT’s interest in this business is because of its expandability, that is, a wide variety of services that can be provided based on the business.

KT is planning to launch similar services abroad as well. New blockchain-related services based on its partnership with foreign financial companies are anticipated in the near future.

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