South Korea taps into the world of its tech-savvy population by planning to launch blockchain-based digital identity, which aims to replace the traditional physical identity system in operation across the globe. This is part of the country’s latest venture to prove its support for blockchain technology.
In an era where people now work from home, make cashless payments, and explore the Metaverse, digital ids embedded in smartphones are among the latest emerging technology that supports a digital economy.
The Korean Government will launch digital ids in 2024 and aims for about 45 million citizens to adopt them within two years of its launch. Under this plan, the government intends to adopt a decentralized identity system which means the government will have no access to the details of the digital identities used, nor will they have access to the information stored on smartphones.
Presently, South Koreans are identified by their resident’s registration card, an identification system akin to the social security card in the United States. However, according to a report by Bloomberg, these digital ids will be embedded inside mobile apps, making it easier and accessible to everyone with a smartphone.
An open document by the World Bank Group describes digital ids as a “game changer” that will benefit citizens, businesses, and the government. In addition, a study conducted by McKinsey Digital indicates that using digital ids could increase a company’s Gross Domestic Product (GDP) by as much as 13% while reducing business costs by trillions of dollars.
Potential Benefits of Digital IDs
In stressing the importance of the adoption of digital ids, Hwang Seogwon, an economist at Korea’s Science and Technology Policy Institute, explained that “the use of digital ids could yield significant economic benefits in finance, taxes, healthcare, transportation, and other areas and may catch on quickly among the Korean population.”
However, he also noted that there must be a proper technological risk assessment to ensure that the danger of using digital ids does not outweigh the benefits.
The widespread use of digital ids is anticipated to boost government efficiency. It will save time and effort for administrative work, increase consumer credit, reduce wage fraud, facilitate trade and generate new markets.
The system will provide a more convenient and accessible verification process where users would no longer be required to take photographs of their certificates or use authentication codes sent via text for online verification.
Other potential uses of digital ids include; facilitating online medical services, expediting hotel check-ins via smartphones, preventing theft and ID forgery, and remote contract approval.
Suh Bo Ram, the director-general of Korea’s digital government bureau, also noted that Korea could reap up to 60 trillion won (42 billion dollars) in economic value, which is close to 3% of the country’s national GDP.
South Korea’s Bullish on the Metaverse
Korea’s impact in the crypto/web3 space is no news to the crypto community, as the country has always been vocal about its commitment to the Metaverse; and has constantly shown interest in the crypto/web3 space.
According to the Portulans Institute, a Washington-based think tank, Korea currently ranks number one regarding tech applications in daily life, business, and government. Moreover, their zeal for early adoption helps them gain recognition as one of the most tech-savvy countries in the world.
It is to be noted that the launch of the digital ids would not be the first time the country is putting into effect a blockchain-based digital id. For example, as of August 2020, over one million South Koreans began using a blockchain-powered driver’s license, which is operated via the country’s PASS mobile app.
Also, in September 2020, Korea Internet & Security Agency (KISA), A South Korean government agency, began plans to implement a blockchain-based employee id system.
Estonia and Greece are among the few other countries practicing this identification mode. In Estonia, for instance, its 1.3 million eligible citizens have digital ids and use them to vote, sign documents, and pay bills.
There is no doubt that South Korea is leading the way in all things blockchain and Metaverse, but it is expected that other nations will follow suit in no time. ReportLinker, in its 2021 report, estimates that by 2025, the market for blockchain identity will increase by $3.58 billion.