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The Saudi-Emirati pilot crypto-currency will reportedly be targeted towards banks in order to facilitate cross border transfers. Photo: iStock

The island of Jeju has asked to become a “special zone” for blockchain and crypto-currencies at a meeting with the central government.

According to the Korea Joonang Daily, governor Won Hee-ryong  made a formal request during talks with Kim Dong-yeon, South Korea’s Minister of Strategy and Finance, and other “high-ranking government officials and policymakers” on the island last week.

Won reportedly said Jeju should be designated as a “special blockchain and crypto-currency… global zone”, and the first step was to form a blockchain-focused “Jeju-government joint task force”.

South Korea’s largest island, Jeju is 100 kilometres to the south of the mainland. Despite being the location of mass anti-communist massacre in the late 1940s, it has been a tourist mecca for decades because of its semi-tropical climate.

For the last 10 years the island has been a “special self-governing province”, and has promoted its capital, also called Jeju, as an “international city” by offering business tax breaks and incentives, aiming to compete with the free ports of Hong Kong and Singapore. Core business sectors are tourism, healthcare, renewable energy, education – with a focus on theEnglish language – and high technology.

South Korea has become a global epi-centre for blockchain development and crypto-currency trading and the government has attempted to walk the fine line between development and regulation. The Ministry of Strategy and Finance tried to clarify matters when it announced last month that blockchain will be managed as a “formal industry” with a system of classification, surveys and statistics.

Governor Won clearly believes that Jeju’s relaxed and globally-focused corporate structure means it already has the framework to allow blockchain to flourish, but he admitted that “drastic deregulation” would be required.

Blockchain start-ups in Jeju, said Won, will be free to hold initial coin offering fund-raising rounds. Although not technically illegal, ICOs were effectively banned by Seoul regulators at the start of this year.

“Entrepreneurs looking to innovate should be allowed to raise funds through crypto-currency,” Won said, adding that this would allow blockchain to raise funds domestically instead of going to Swiss or Singapore jurisdictions — where regulatory frameworks are currently more favourable.

“Blockchain can cut costs, provide stable transactions and essentially has the potential to become a game-changer that could alter the ecosystem of the internet platform industry,” Won said. But Korea needed to become a blockchain “leader rather than a consumer”.

Provincial government officials said after the meeting that Jeju’s new “blockchain industry” joint task force was now being created and could be launched as early as September, according to the Korea Joonang Daily.