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A South Korean Province Wants To Replace Local Fiat Currency With Crypto

A province in eastern South Korea is planning to drop the local fiat currency in favor of its own cryptocurrency. According to media reports, the province of Gyeongsangbuk-do wants to introduce a new crypto coin to be used in place of gift certificates.

Do Away With Gift Certificates

The province, which also goes by the name Gyeongbuk, aims to use the new cryptocurency to replace gift certificates issued by cities. Currently, about 60 municipalities in South Korea, including Gyeonbuk’s own nine cities, issue gift certificates that function as local currencies. The move is meant to prevent capital flight and help in supporting local economies.

Of the nine cities within the province, Pohang takes the mantle as the most populous (with about half a million people). The city also leads, by volume, in terms of issuance of gift certificates.  Media reports indicate that between January and May of this year, Pohang sold gift certificates worth north of 100 billion won (roughly $90 million).

First of Its Kind

On August 27, Gyeongbuk’s Science and Technology Policy Department announced that mobile communication companies, 10 banks, government officials, and a university research team were set to meet for the initial issuance of the new cryptocurrency. The new coin is called the Gyeongbuk Coin. This will be the first time that such an event is taking place. The issuance is expected to net around 100 billion won ($90 million) by mid-2019.

To facilitate a successful circulation of the new coin, an exchange platform will be created to enable users to buy or sell. Merchants can accept payment by scanning QR codes with their smartphones. However, such a development is bound to present some challenges, and Chung Sung-hyun acknowledges that. Chung heads the Science and Technology Policy Department in Gyeongbuk province. Commenting about it, Chung mentioned the creation of systems for the issuance of the coins and guiding merchants on how to use the coins as some of challenges expected.

Team At Work

The province has since sent a 10-member team of experts to Zug, Switzerland, for a benchmarking mission. Zug is famous as the home of various crypto and blockchain startups like Xapo, Shapeshift, and Ethereum Foundation. The team met with local business operators and government officials.

After the meetings, local news outlets quoted a provincial official as saying that the experience gained by the benchmarking team could be used to create blockchain-based digital ID cards. The ID cards would be mainly for the over 5,000 employees working with the provincial government.

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Binance Reveals Liechtenstein-Based Fiat-To-Crypto Exchange

In a recent move, Binance has partnered with Liechtenstein Cryptoassets Exchange (LCX) to launch a partnership fittingly named Binance LCX. As per a press release posted on August 16th, the collaboration between the two entities will be launching a fiat-to-crypto portal in Liechtenstein. 

Binance’s “experienced team” will take a key role in providing and maintaining the exchange infrastructure, while Binance LCX will take the reins for customer support, legal compliance and due diligence, KYC, AML and communication with local governmental figures/regulatory bodies. The entity spawned as a result of the partnership intends to build a team of 10 to 15 individuals to support the exchange and will be situated at its Liechtenstein office.

The fiat-to-crypto exchange will offer support for Swiss Francs (CHF) and Euros (EUR), coupled with “major cryptocurrency pairs.” While the two firms have not released an extensive list of pairs, it is widely speculated that the new exchange will support BTC, ETH, and XRP at the bare minimum. The latter cryptocurrency noted may be a surprise to some, as the regulatory state of this asset is still up in the air. However, recent tweets from Michael Arrington, an XRP proponent and the co-founder of TechCrunch, and Binance CEO Changpeng Zhao have led some to believe that XRP/EUR and XRP/CHF support is likely.

The newly-established firm also noted that it will add more trading pairs as time moves on, with planned pairs being subject to regulatory approval/disapproval. Changpeng Zhao, or CZ as he is better known by the cryptocurrency community expressed his excitement for this venture, stating:

I believe Binance LCX will create a sustainable and reliable fiat-crypto gateway for professional and regular investors alike. I hope Binance LCX will drive new standards for usability and compliance for the blockchain industry, and we are very excited to bring the relevant experience and best practices to grow our team in Liechtenstein

In a similar comment, LCX CEO Monty Metzger, the primary executive at the other end of the partnership, also added that his firm is thrilled to join hands with Binance in this move. While many governments are hesitant to openly endorse cryptocurrency-related companies, individuals or ventures, Liechtenstein’s Prime Minister issued a welcoming statement and even made an appearance at the grand unveiling of the Binance LCX office.

Liechtenstein has quickly proven itself to be a “crypto haven,” with the regulatory environment surrounding this nascent asset class being rather lax. The small European country has begun to see a large influx of crypto-related companies, as some projects seek crypto-friendly banking relationships. Taking this into account, it is clear to see why LCX wrote that “Liechtenstein is the ideal location” for this new exchange.

As reported by Ethereum World News previously, Binance made a similar announcement in June, launching its first fiat-to-crypto exchange in Uganda. So although the global roll-out may be slow, it has become apparent that Binance is ready to tackle the lack of fiat support in exchanges worldwide with its own platforms.

Photo by Henrique Ferreira on Unsplash