South Korea has introduced a new regulation that paves the way for public institutions to use blockchain-based digital currency for operating expenses. According to the regulation, public institutions will be able to pay for certain operating expenses, including promotional and similar expenditures made by employees in the course of their official duties, using blockchain-based digital currency.
South Korea’s Ministry of Science and ICT announced the approval of nine regulatory sandbox exemptions for new technologies and services. The decisions were made following a written review by the 45th ICT Regulatory Sandbox Committee, held on September 21st.
Under the new regulation, public institutions will be able to pay their operating expenses not only with physical cards but also using QR codes via smartphones. This aims to expand the use of digital payment methods in public spending.
It has been stated that in payments made with blockchain-based digital currency, reconciliation processes will be completed simultaneously with the payment itself. This feature could allow for faster transaction processing, instead of conducting payment and subsequent settlement processes in separate stages.
South Korea has recently been leveraging regulatory sandbox mechanisms to test the use of blockchain technology and digital assets in various fields. New exemptions are also among the steps taken to test new technologies in real-world use cases, including public spending.
The details regarding which types of digital currency will be used by the public institutions covered by the regulation, and on what scale the implementation will begin in these institutions, were not shared in the current statement. The implementation of the new system will also monitor how digital currency payments will be used and monitored in public spending.
*This is not investment advice.