Busan, South Korea’s largest port city, has been declared by the national government a “regulatory-free zone” for blockchain and crypto development. This is a long-awaited move that has only now been formalised.
Busan has long been a trade, finance and innovation centre for South Korea. The city is not new to blockchain technology and has already tested it for managing its own port.
Investments of 25 million dollars
It is expected that investors will inject 29.9 billion Won ($25 million) into the region by 2021 and the development will be distributed between the Munhyeon Innovation District, the Centum Innovation District and the Dongsam Innovation District.
BNK Busan Bank, a local institution listed on the South Korean stock exchange, will oversee the management of the blockchain development in relation to financing.
The project will include the development of an app that will allow citizens to capture videos of natural disasters or crimes and send the files to the relevant authorities, complete with location information. An incentive system will encourage the use of the app.
ICOs will not be allowed
However, Busan will not be completely free of regulation.
For example, ICOs will not be allowed and the national plan is still very conservative with regard to cryptocurrency projects. Busan has in fact explicitly stated that the reforms are not designed around cryptocurrencies.
The plan started in April when Busan got the better of Jeju, a province already known for its relatively liberal policies.
Busan’s recent designation as Korea’s blockchain capital is in line with the ideas of the current government.
President Moon Jae-in recently promoted regulatory sandboxes. These sandboxes allow the temporary suspension of certain rules so that new technologies and services can be tested outside the complex legal and bureaucratic system in the country.
As many as 100 of these sandboxes have been proposed for 2019 and, to date, more than 80 have already been approved.