Amid growing concerns of China pulling away in the emerging digital economy, South Korea’s government is set to invest $400 million in blockchain research and development (R&D) as the country looks to revamp its digital technology sector.
Blockchain R&D Fund to Be Utilized Over Five Years
According to ZDNet Korea, the country’s Ministry of Science and Technology has plans to invest 480 billion won (about $400 million) in blockchain R&D efforts. The government will at the end of May decide on proceeding with the planned funding project.
For the Ministry of Science and Technology, blockchain forms an integral part of the emerging digital economy. Indeed, insiders at the ministry say the emerging technology will form the base layer of the developing ‘data economy,’ and South Korea needs to stay ahead of the curve.
Thus, South Korea’s government wants to launch Yeta; a system for examining the feasibility of blockchain R&D projects. Yeta forms part of the larger Data Economy Revitalization plan being developed by the country’s government.
The blockchain R&D fund will reportedly focus on projects that navigate the decentralization, scalability, and security trilemma. Policymakers say a concerted approach to developing decentralized ledger technology (DLT) solutions could see South Korea leading the next-generation of blockchain evolution.
Commenting on the need for swift action in the emerging blockchain space, Chae Sang-mi of Ewha Womans University in Seoul remarked:
“The first mover benefits the most because blockchain is a technology that has more influence and more effective network effect.”
Challenging China’s Growing Blockchain Dominance
News of the government’s plan to invest $400 million in blockchain development also comes at a time when China appears to be doubling down on supporting DLT projects. Reports indicate that authorities in the country are concerned about China pulling too far ahead of South Korea in the ongoing competition between major global economies in the race for blockchain supremacy.
Both public and private sector participation in blockchain-related projects are already apparent in China. Back in April, BTCManager reported IOST joining the country’s Blockchain Service Network (BSN) as a qualified developer. China’s proposed central bank digital currency (CBDC) which is in the testing phase already has retail partners like McDonald’s and Starbucks.
The planned $400 million blockchain R&D fund comes at a time when the country’s DLT scene appears to be experiencing a resurgence. Tough regulations in 2019 had caused a significant decline in South Korea’s once-bustling digital economy as startups elected to list their tokens on overseas exchanges.