South Korean government allocates $2.6 billion to develop blockchain and other financial technologies

South Korea announced a systematic plan to popularize digital currency on Monday, pledging to further promote its use in order to stimulate the development of financial technology.

Yim Jong-yong, Chairman of the Financial Services Commission (FSC) of South Korea, spoke at the 12th Fintech Hub Demo Day:

The (South Korean) government will refer to the policies of the United States, Japan and other countries, analyze global trends, and systematize digital currency in all aspects.

He added that the government and local financial companies will set up an industry alliance this year to conduct joint research on blockchain technology and develop various pilot projects.

Blockchain is a key technology of the digital currency Bitcoin. It shares data through a network of personal computers and can track and record all Bitcoin transactions.

Um said the government will earmark 3万亿韩元(US$ 26.5亿) for the development of financial technology over the next three years.

South Korea will release its fintech development roadmap in the first quarter of 2017, and its funding move sets the tone for the development of the second phase of the plan.

The government is currently working to remove some unnecessary fintech regulatory measures. Yan Zhongyong said:

In the second phase of development, the government will work to reshape the existing system and build a positive fintech environment.

At the same time, the Financial Services Commission of South Korea also signed a "Memorandum of Understanding" (a document recorded in text after the two parties reach a consensus through consultation and negotiation) with the Monetary Authority of Singapore (MAS), establishing a bilateral cooperation relationship in the field of financial technology.

The agreement stipulates that both parties must share relevant information, knowledge and talents.

South Korea has been an active participant in the Bitcoin and blockchain markets. On February 28, 2015, South Korea opened a Bitcoin Center to welcome cryptocurrency enthusiasts.

A year later, the Korea Exchange (KRX) began building and strengthening the over-the-counter market. This new trading system connects buyers and sellers in over-the-counter (OTC) transactions, allowing them to trade securities directly while reducing transaction costs. The Korea Exchange is not the only financial institution in the country interested in blockchain technology. Hana Financial Group, one of the largest bank holding companies in South Korea, is currently a member of the global blockchain consortium R3.