South Korean Island Wants to Become Blockchain, Crypto Hub

The South Korean island of Jeju has officially requested the central government to allow it to become a special blockchain and cryptocurrency zone, local media reported on Monday. The Initial Coin Offerings (ICOs), which are currently illegal in the country, would be allowed in the region with the aim to bring back the Korean investors, the provincial governor Won Hee-ryong said when revealing his idea for blockchain island.

Won decided to ask Seoul for the status after meeting with high-ranking policymakers in the region last week. Jeju has a special economic position in the country as a free international city.

“Blockchain can cut costs, provide stable transactions and essentially has the potential to become a game changer that could alter the ecosystem of the internet platform industry,” Won said. “For Korea to become a leader rather than a consumer of this new global industry, we need to quickly allow [the operation of] blockchain and cryptocurrency [firms].”

After South Korea banned ICOs in 2017, domestic investors chose to move their capitals in more favorable countries like Switzerland and Singapore, the governor explained. The Jeju’s authorities are in regular talks with Korean cryptocurrency companies like ICON (ICX), according to sources of Korea JoongAng Daily. 

“Entrepreneurs looking to innovate should be allowed to raise funds through cryptocurrency,” Won explained.

The Jeju’s government plans to establish a special department to oversee the blockchain island plan by the end of the month. However, it is unclear how the central authorities will react as they have given mixed signals. Several MPs want to lift the ICO ban partially, but their plan is still an idea, and no bill has been tabled to parliament so far.

Another law initiative - the so-called first Korea cryptocurrency law has been waiting for a vote since March. The bill aims to give the financial regulator, FSC, new powers to policing the virtual exchanges rather than promoting their growth, according to the Financial Services Commission head Hong Seong-ki.

On the other hand, last month the central government officially recognized the crypto industry by releasing a new classification system.