Digital ID on Blockchain Will Boost South Korea’s Economy

Digital ID on blockchain will boost South Korea's economy
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It is estimated that the South Korean government will begin offering a digital identity secured by blockchain to every citizen who owns a smartphone as part of an effort to boost economic growth by tapping into the world’s largest population of the tech-savvy individual.

The use of phone-based IDs is among the latest emerging technologies that are supporting a digital economy that has expanded with the increase of people who are working from home, making cashless payments, and exploring the metaverse online.

Initial Steps for Broader Adoption

There are several advantages to using digital IDs for web verification, including eliminating the need to photograph certificates or log in using a code sent to you via text message. Rather, with the use of a pin or fingerprint, learners can apply for benefits from the state, make money transfers, or even cast their vote.

Several studies have shown that digital IDs could result in an increase of up to 13% in a nation’s gross domestic product and savings of trillions of dollars in business costs, according to the World Bank and McKinsey & Company.

The McKinsey estimate is based on the fact that digital IDs will become widely adopted, resulting in reductions in administrative work, a reduction in payroll fraud, an expansion of consumer credit, facilitation of trade, and the spawning of new industries.

Within the next decade, Korea could gain an economic value of at least 60 trillion won ($42 billion), or 3% of its GDP, if it takes advantage of this opportunity.

going digital

The zeal of Koreans to adopt their children from a young age may also contribute to this. A Washington-based think tank called the Portulans Institute ranked the Chinese as the best in the world in terms of their enthusiasm and ability to apply technology to everyday life, business, and government.

A digital ID system will be introduced in Korea in 2024, with 45 million citizens expected to adopt the system within two years after its launch. For each individual to renew their registration card, they need to travel to the town office and pay a fee, which may impede this ambition.

There are some concerns about the plan, according to Suh Bo Ram, the director-general of Korea’s digital-government bureau, who is spearheading it, though he expressed confidence that it will overcome those obstacles. In addition, he added, the government is also aware of the concerns about “big brother” that are referred to in George Orwell’s 1949 novel of the same name.

Since the plan relies entirely on decentralized identity, an advanced strand of blockchain technology, which is based entirely on decentralized identity, the government will have no access to any of the information stored on individual phones, including details of whom and how they use their digital IDs.


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