South Korean telecom firm to launch local cryptocurrency

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South Korea’s largest telecoms company, KT Corporation, has been chosen to operate a new local cryptocurrency platform for Gimpo City, according to reports.

First reported in ZDNet, KT Corporation was chosen as a result of a competitive bidding process to run the platform on behalf of city hall, after local authorities announced a plan to issue KRW11 billion in cryptocurrency annually—equivalent to around $9.7 million.

The bidding process had seen fierce competition from a number of would-be operators, vying for the chance to issue and facilitate the new payments system. As one of the country’s largest companies, KT Corporation has been described by sources as a natural fit for the project.

A pilot project is expected to commence in March, with plans for the wider rollout from April. The cryptocurrency, dubbed the “K token,” will provide a new means of payment for residents and merchants alike, as well as for funding social projects and development.

Merchants in the Gimpo area will be able to accept payments in the token by QR code, and funds can be converted into fiat without attracting additional fees. It is hoped by eliminating conversion fees, merchants will be persuaded to use the technology, in a bid to encourage the city to switch to cashless blockchain payments.

According to reports, KT Corporation is on hand to expand the program to other neighboring cities, should the Gimpo project prove successful.

KT Corporation will now continue work on the development of the K token, ahead of the start of the initial pilot program in a few weeks’ time.

KT senior vice president Yeong-il Seo welcomed the decision to award the contract to KT Corporation, saying the cryptocurrency would “contribute to the revitalization of the regional economy.”

The announcement marks the latest move in towards mass adoption of crypto payments in South Korea, one of the most established cryptocurrency markets in the world.

Recently, the city of Busan in Korea announced it had signed a memorandum of understanding with Hyundai Pay to develop blockchain infrastructure in the city, with several others reported to be eyeing the KT Corporation project keenly.