South Korea Is Writing the Playbook for Crypto Adoption

By Nikolai Kuznetsov

As William Gibson famously observed, the future is already here – it's just not very evenly distributed. If you want to see what a crypto-integrated society looks like, you don’t need a time machine: a plane will do. Take a trip to Seoul and you’ll see what a world infused with crypto looks like. South Korea is crypto crazy, as you’d expect of the most tech-literate nation on earth blessed with the world’s fastest internet.

It might not have invented cryptocurrency – as far as anyone can tell, Satoshi Nakamoto was either American or European – but South Korea has certainly made up for lost time. In the 12 years since Bitcoin emerged, Asia has become a crypto and blockchain powerhouse, with South Korea the fulcrum that makes it move.

The country’s largest telecom operator, SK Telecom, is launching a web3 wallet, while major fintech firm Dunamu plans to invest $380 million to create 10,000 new web3 jobs in the next five years. Within the crypto industry, leading entities such as Solana are also cognizant of the country’s crypto credentials, not only as consumers, but as builders. The Solana Foundation and Solana Ventures have pledged $100M to invest in South Korean web3 startups.

Writing Checks to the Metaverse

One vertical that’s been particularly well received in South Korea is the metaverse: the virtual worlds that web3 and NFTs conjure, with blockchain serving as the conduit that transmits all the moving parts. South Korea is big on games (Seoul is the esports capital of the world) and thus it’s no surprise that its tech-savvy populace has latched onto the metaverse meme.

The government of South Korea is the first to directly invest in the metaverse, to the tune of $177M, which one minister described as “an uncharted digital continent with indefinite potential.” The enthusiasm with which Koreans have greeted the world of web3 is best embodied by Klaytn, which has assumed the moniker of “the metaverse blockchain for all.” It spawned an array of startups chipping away at web3, financed by accelerators such as Krew Studios, which incubates enterprising Klaytn projects.

OpenSea, the world’s largest NFT marketplace, has also partnered with Klaytn, making it only the fourth blockchain it has integrated with. This accomplishment, along with other ecosystem highlights, was revealed by KLAP Finance in its State of Klaytn report. KLAP, a recently launched lending protocol, is also part of South Korea’s crypto success story, having become the third most popular decentralized application on Klaytn within days of launch.

Built It and They Will Come

The dizzying rate with which Korea has embraced crypto stands in stark contrast to the hesitant, dithering stance of the West. In the United States, for example, blockchain developers are forced to walk a legal tightrope while retaining an army of lawyers to ensure they don’t fall foul of complex and often opaque edicts issued by competing government agencies. For years now, U.S. policymakers have promised to deliver greater regulatory clarity, while treating crypto as a hostile force that must be neutered rather than nurtured.

The South Korean government, for its part, is not blind to the darker side of crypto; no one is pretending that the industry doesn’t attract its share of ponzi schemers, money launderers, and hackers. How could they not with the notorious Lazarus Group, credited with stealing billions of dollars of crypto, lurking just north of the border? But what officials in South Korea have grasped is that cryptocurrency and its underlying technology are a net good, and that where there’s money, there will inevitably be chancers. Better to face up to it than bury heads in the sand and pretend that crypto’s just a passing trend that will go away.

“Asia is home to many of the fastest growing economies in the world, which thrive in a highly competitive environment,” explains Clayton Mak of ParallelChain Lab. “This fosters forward-thinking-minded reformers who are constantly pushing for greater digital inclusion and early adoption. There are many firm believers in the potential of web3 to liberate the existing digital constraints in data procurement and transactional exchange. Many of the Asian economies strongly pivot towards blockchain as the digital infrastructure to propel businesses forward through the versatility of web3.”

Japan, the Asian tech darling of the 1980s, lost out to South Korea in the 90s, with the emergence of tech brands such as Samsung and LG spearheading the power grab. Something similar is now occurring with crypto. The days when Japanese exchange Mt. Gox reigned supreme are long gone. In their wake, South Korea, with its build-first-regulate-later attitude, has emerged as the region’s crypto champion. If it knows what’s good for its economy, the U.S. should ditch the red tape and step up.

Author bio

Nikolai Kuznetsov is a financial analyst with extensive experience in the stock market, investment research and various assets such as cryptocurrencies, FX, commodities, equities and bonds, alongside educating traders as a teacher and a mentor. Nikolai has written for Forbes, TheNextWeb, Investing.com and Cointelegraph.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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