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The South Korean government has recently designated the second-largest city by population in the country, Busan, as a “regulation-free zone” for crypto and blockchain firms, in which they will be able to pursue their developments without worrying about regulations.
The government of South Korea is planning to test Busan for “token economy,” where users will be rewarded with digital tokens for their contribution in project developments.
It is important to note that cryptocurrency-related businesses will not be enjoy the benefits of operating in the blockchain regulation-free zone. In other words, companies dealing with cryptocurrencies will not be exempted from the regulations.
As per the new policy in Busan, blockchain-based firms will be exempted from the sum of total 11 regulations, which in result could potentially bring in multi-million-dollar investments to Busan. The government believes that lifting regulations for blockchain firms and applying it to local industries like retail, tourism, hospitality, finance, etc. will lead the city toward ‘blockchain industrialization.’
Apart from Busan, it was decided by South Korea’s Regulation Free Zone Committee to designate six other regulation-free zones for various purposes. The meeting took a place in Seoul on July 23rd and it was spearheaded by prime minister Lee Nakyeon.
One of these particularly-exempted areas is of course Busan, which is designed as a Regulation free Zone for blockchain initiatives. Other provinces and cities designated as regulation-free zones includes Jeonnam province (regulation-free zone for developments in e-mobility) Kangwon province (for digital healthcare companies) Daegu City (for smart wellness), Gyeongbuk province (for next-generation battery recycle technology), Chungbuk province (for smart safety) and Sejong city (for autonomous driving).
Kim Hyeonsuk, the head of the Converged Industry team of Busan City, explained:
“Busan has a solid industrial bedrock as the city of financial hub, tourism, and logistics & maritime. It can draw bigger synergy when blockchain is applied as our industrial infrastructure is already established, and this was the critical point to be selected in the process of designation.”
Companies that will operate in the Regulation Free Zone of Busan will be encouraged to address key areas of future logistics system, smart tourism, public safety and issuance of digital tokens. Companies’ blockchain-related initiatives such as BPN Solutions, Busan Bank, Hyundai Pay, Coinplug, Korea Tour Pass, etc. will be some of the ventures exempted from regulations.
The city may invite more companies to take part in its blockchain-focused projects and further boost blockchain development in the city. Busan is planning to flow in 29.9 billion won (about $25 million) into selected 11 special inner-regions such as Munhyeon Innovation District, Centum Innovation District, and Dongsam Innovation District by 2021.