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South Korea Budgets $4.4 Billion to Blockchain Technology

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Blockchain

Blockchain may still be in its infancy, but it’s the talk of the town as analysts contemplate its incredible potential.

Granted, only 3% of Fortune 500 companies use it at the moment.

Though, that’s likely to change as its global acceptance continues.

Already, banks and global governments are using blockchains as distributed ledgers to revolutionize how information is stored. By doing so, they’re seeing transactions done with quicker speeds, lower costs, more security, and fewer errors. They are also eliminating central points of attack and failure.

In China, the Ministry of Industry and Information Technology has a blockchain-focused lab. It will focus on the application of the technology in the data security industry.

South Korea Budgeting $4.4 billion

South Korea earmarked five trillion won ($4.4 billion) towards its “Growth through Innovation” program with a focus on blockchain and artificial intelligence (AI) for 2019.

That’s a sharp 65% increase from 2018.

Over the next five years, the investment could double to 10 trillion won.

All as the government remains keen on developing blockchain, big data and artificial intelligence. “The goal is to focus on promoting big data and AI, developing blockchain technology to ensure data management security and boosting the sharing economy,” according to the statement South Korea’s Ministry of Economy and Finance.

The South Korean island of Jeju has also asked to become a special blockchain and cryptocurrency zone. As quoted by the Korea Jonngang Daily, the provincial governor, Won Hee-ryong noted that,

“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. “For Korea to become a leader rather than a consumer of this new global industry, we need to quickly allow [the operation of] blockchain and cryptocurrency [firms].”

Tax Perks for Blockchain Startups

The government wants to revise tax rules to widen benefits for companies focusing on development of technologies, including blockchain.

Under the current tax rules, a company must allocate over 5% of its the previous year’s gross sales to research and development and also 10% of the R&D investment should focus on new growth technologies. Unfortunately, it does prevent start-ups that are in their first year to become eligible for tax deduction. To address that, the government proposed the requirement be changed to more than 5% of the current year’s gross sales.

 

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