Last week KT, South Korea’s second-largest mobile phone provider, announced that its blockchain revenues in 2020 had grown sevenfold without giving figures. An important blockchain activity for KT is local digital currencies, which have also been used to distribute COVID-19 relief in some areas. Today news emerged that KT’s platform issued KRW 2.2 trillion ($2 billion) in local currency in 2020, according to Paxnet.
Referred to as the GoodPay solution, the telecoms provider has partnered with several city municipalities, including Gimpo Pay and the Dongbaekjeon currency in Busan City. The currency is used to boost small and medium-sized retail firms by offering cash back on in-store and online local purchases. The regional government subsidizes the discount. This is not dissimilar to the Chinese digital yuan trials where the city gives away around $30 in a lottery which is usually meant to be spent locally.
Busan is Korea’s second-biggest city after Seoul and hence it accounts for KRW 1.2 trillion of the issuance ($1.1 billion). Paxnet claims the operating fee for a local currency is KRW 10 billion ($9 million) plus 0.7%. If those figures are accurate, the Busan income to KT would have been around $17 million.
Apart from Gimpo and Busan, other regions where SK’s digital currency platform is used are Ulsan, Sejong, Gongju, Iksan and Chilgok. However, the Korean Mint is also active in the sector.
Another area that mobile firms are exploring with blockchain is enabling mobile payments while roaming overseas. That’s something explored last year by the Carrier Blockchain Study Group (CBSG).
Update: the calculation of the Busan figure has been corrected