Major South Korean banks have recently been launching a multitude of blockchain-based services, particularly in the areas of Know Your Customer (KYC) procedures and security.
Nevertheless, as reported by Cointelegraph, there are those who believe these institutions are overlooking a key component of blockchain technology, namely digital assets.
Government Supports Blockchain But Not Crypto
Two main reasons have been cited to explain the overall lack of interest in using blockchain technology for settlements, payments and the use of cryptocurrencies.
The biggest factor has been that the South Korean government separates cryptocurrency from blockchain technology, choosing only to support the latter. At the same time, a smaller but noticeable part is that there are firms which merely use the term blockchain as more as a marketing tool rather than an actual applied solution.
Still, the hope is that the technology’s overall adoption by traditional market participants will bring about the desired influence to digital currency.
Merging Traditional and Digital Finance Worlds
As blockchain sees increasing adoption by financial institutions, so too have there been changes in the players’ demographics. More former civil servants and traditional bankers have been observed making the switch to digital assets, a trend which has been welcomed by crypto watchers.
Some, like Jun-heon Hwang of Coin Student fame, view the merging of traditional and digital finance worlds as part of a wider global trend.
South Korea’s government has this year almost doubled its projected spending on blockchain development for selected cities from the same period last year.
Analysts are currently watching how domestic buyers will affect the global market if and when the government relaxes its regulatory measures on digital assets.