Seoul’s mayor, Park Won-soon. Photo: AFP/Ed Jones
Seoul’s former mayor Park Won-soon, who shocked the nation when he committed suicide amid sex-abuse allegations. Photo: AFP/Ed Jones

The crypto site Coindesk is reporting that Seoul mayor Park Won-soon is about to launch a city-funded crypto-currency called the “S-Coin.” Read further into the story and it’s clear this is not about the launch of a new form of money that will replace the existing financial system.

But it is still intriguing stuff indeed.

The S-Coin, Park told Coindesk, will be used to pay for journeys on the city’s metro system, for welfare or education program credits or to reward citizens helping the environment by saving on electricity, water and gas consumption. Bitcoin it is not.

It actually fits into a wider information strategy masterplan for Seoul, explained Park, which the city started working on with Samsung in November 2017. The masterplan aims to create South Korea’s first roadmap of blockchain-based municipal innovation.

Danny Crichton, writing in TechCrunch, argued that it could prove to be an example of what he calls intriguing municipal “algorithmic zoning.”

“South Korean cities,” wrote Crichton, “like counterparts elsewhere around the world, are investigating whether blockchain technology could provide mechanisms like algorithmic zoning. City governments often hold many records of interest to blockchain specialists, including property records, ID records, zoning codes, business and health licenses, as well as construction permits. Creating a transparent and efficient clearinghouse for such information could generate significant gains for the quality of urban governance.”

In this context, concluded Crichton, it is important to separate such initiatives from money-focused crypto-currencies. “Even when such tokens might provide a financial benefit, such as a discount on subway fares or housing, these tokens are not designed to be fungible currencies in the same way that cryptocurrencies are, but instead convenience tools to provide digital access to amenities.”

South Korea has witnessed something close to a speculative crypto mania over the last two years that pushed the central government to roll out a raft of strong regulatory policies on crypto-currencies.

“The last time the Ministry of Justice announced regulatory measures,” Park Won-soon told Coindesk, “there was tremendous resistance, and the government seemed to think deeply about it,” but it is the role of local government to “create cases and models.”

The Seoul government says it plans to complete its blockchain masterplan within April, although no date has been set for the launch of the S-Coin.