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Crypto Pay is trending in South Korea

South Korea cryptocurrency

Crypto Pay is trending in South Korea

South Korean retail chains are embracing crypto- and blockchain-powered payment platforms – and so are their customers, according to new industry data.

There has been a 136.6% rise in the number of crypto- and blockchain-powered pay transactions over the course of the past 12 months at CU (STORE), one of the nation’s biggest convenience store chains. However, the report did not provide any other numbers.

In either case, CU, which is operated by the BGF Retail business group, accepts a number of crypto-related payment options, including Danal’s Paycoin platform and Chai’s Chai Pay.

Paycoin makes use of an eponymous token – paycoin (PCI) – that trades on platforms such as Coinbase. Users make real-time exchanges via an app, and can also trade coins for bitcoin (BTC), or make purchases using bitcoin.

Danal has scored a massive hit with its app and token, and just days ago struck a partnership deal with Tom n Toms, one of South Korea’s biggest coffee store chains.

It also has pay deals in place with a number of other retail giants, including the Tom n Toms rivals Ediya Coffee and Hollys, as well as international chains like Burger King and Domino’s Pizza. The takeout and delivery chicken giant BBQ is also a recently added partner, as is the cinema chain CGV.

Per a press release circulated to journalists late last month, Danal is now eyeing global market expansion and says it currently enables BTC pay at 100,000 merchants in South Korea. The firm added that it is planning to expand its operability to encompass protocols such as Ethereum (ETH) and ICON (ICX).

A recent deal with Samchully Motors, a South Korean BMW dealership, will also allow app users to buy luxury cars using crypto.

Last year, Chai received a USD 60m investment injection from the likes of SoftBank.

But CU’s crypto involvement goes deeper than just its Danal and Chai partnerships – the chain also allows its customers to swap their loyalty points for milk (MLK) tokens. MLK was listed by the market-leading crypto exchange Upbit earlier this year, and is also listed at the rival exchange Bithumb.

As reported in September, South Korea’s crypto industry may have suffered a body blow over the weekend, with a slew of exchanges and wallet providers closing or suspending business operations: a tough regulatory deadline turned a once-thriving sector into a tiny “oligopoly.” But the story is very different in the world of blockchain-based pay and fiat KRW-pegged stablecoins.

The Korea Minting and Security Printing Corporation (KOMSCO) is a firm that until relatively recently made its money from cash: the company prints banknotes and mints coins for the treasury.

But in recent years, it has moved away from paper and notes, and deeper into the fast-growing world of local stablecoins. Working in conjunction with city and provincial authorities around the nation, KOMSCO has rolled out scores of local stablecoins and blockchain-powered paperless gift certificates.

Many authorities used these programs to send the equivalent of coronavirus pandemic-mitigating stimulus checks to local residents – in a drive to steer people away from monolithic e-commerce platforms and back toward local businesses. Seoul has also been on a “cashless” and “contact-free” drive, a factor that has helped KOMSCO boost its range of stablecoin offerings.

Last year, the company posted record profits, went on a hiring drive and announced plans to pay its staff a portion of their salaries in stablecoins.

Now the firm appears ready to make another push forward into the world of cash-free, blockchain-powered payments. Per the Choongchung Times, the KOMSCO’s own blockchain-powered gift certificate platform, Chak, rolled out in 37 cities and counties nationwide last year, after launching in 2019. But by the end of this year, the platform will have rolled out in an additional 70 cities and counties across South Korea.

Caution needed in future regulatory moves

However, investor caution is still necessary as regulatory moves haven’t yet formed in most countries surrounding this still burgeoning crypto market. While established financial institutions have begun to accept cryptocurrencies as a part of their investment portfolios and a part of their business models, governments haven’t yet come up with a clear direction in the industry, still remaining undecided whether to see it as innovation or speculation.

The future of Bitcoin as well as other cryptocurrencies are hugely dependent on how major countries’ regulatory systems will be finalized.

Despite the government’s sluggish moves in the digital asset area, the local crypto market is exploding at an immense speed. The total amount of transactions at four local major crypto exchanges during the first two months of this year stood at 440 trillion won, already far exceeding 350 trillion won, the entire transactional amount of last year.