Blockchain is a distributed, unchangeable database that streamlines the tracking of assets and the recording of transactions inside a certain network.
Blockchain creates new cost-saving efficiencies while enhancing the traceability, security, reliability and transparency of data shared over this network. Initially created to facilitate decentralised financial transactions, blockchain has now more uses now than just facilitating exchanges involving bitcoin. In addition to being a crucial tool for regulatory compliance and audits, money laundering protection, record management, financial management and accounting, among other things, the technology has a wide range of advantages, including facilitating international payments, promoting digital inclusion and ID verification.
Southeast Asia, in particular, may stand to gain the most from blockchain's potential for development compared to other areas. As a region, it has an internet penetration rate of 58 percent, with South Korea standing out the most. Given the nearly universal availability of high-speed internet in South Korea, it is not surprising that 93 percent of people in this northeast Asian nation use the internet and 91 percent of the population has access to mobile connectivity. That’s no doubt why we have been observing an increasing number of private-public partnerships for technological development in the country, which will have positive implications for blockchain adoption there.
The basic idea behind private-public partnerships is to use the know-how and infrastructure already developed by established companies and build systems suited to achieving government goals. Earlier this year, for instance, SK Telecom, a subsidiary of a state-owned communications company, signed a joint agreement with blockchain firms aimed at developing a digital wallet that can support cryptocurrencies, nonfungible tokens and digital credentials, including memberships and certifications. As one of the largest mobile operators in South Korea (58% of the market), SK Telecom introducing a user-friendly crypto wallet is an early positive sign for blockchain adoption more broadly in the country.
A second private-public partnership has also now emerged in the country. Binance, the biggest cryptocurrency exchange by trading volume, has signed a Memorandum of Understanding (MoU) with the South Korean city of Busan to help it develop its blockchain ecosystem and promote the Busan Digital Asset Exchange and order book sharing. Binance will use Busan's blockchain regulatory-free zone to promote blockchain initiatives and businesses and provide specialised blockchain education and online resources from the Binance Academy.
This move is in line with the city’s broader plans to become a global blockchain and financial hub. Since Busan was designated as the country’s blockchain sandbox in 2019, a number of projects have made use of the technology. This included the roll-out of a proprietary blockchain-based ID system, cryptocurrency-payment support for various services at Busan’s most popular beaches as well as a blockchain-powered driver's license platform.
The project with Binance will further develop and promote blockchain-specialised education in connection with regional universities and launch projects in the Busan blockchain special free zone. It is the local government’s belief that this partnership will secure a new growth engine for the local economy. Indeed, this very promising initiative expected to start before the end of year, highlights once again that blockchain is shaping the future and governments should already be riding the wave, using the technology to advance public programs locally.