Ground X, the blockchain branch of South Korean tech company Kakao Corp., is making the headlines today after being picked to run trials for the Bank of Korea’s digital currency.
The South Korean central bank was searching for companies to join 10-month cooperation. Kakao will now be responsible for storing and validating unlisted assets as nonfungible tokens [NFTs] on its public blockchain, as the bank was searching for technology help to build its central bank digital currency.
Unlisted investments are shares or assets that aren’t traded on a public exchange. As a result, they are typically traded over-the-counter [OTC]. These shares are generally provided prior to a public offering.
Surprisingly, South Korea’s OTC trading sector has been booming, with K-OTC’s capitalization reaching a new high of over 1 trillion won ($1.1 billion) in 2020.
The increase in OTC trading is an indication of popular interest in digital currencies. The government has imposed strict regulations on crypto-businesses and compelled compliance. Many small companies, on the other hand, have had difficulty finding banking partnerships and are considering shutting down permanently. In reality, big and well-known exchanges like Bithumb were compelled to cut partnerships with foreign exchange platforms. As per a formal statement,
“The trademark use contract with Bithumb Global Exchange and Bithumb Singapore Exchange, which has been using the brand and trademark after signing a trademark agreement with Bithumb Korea Co., Ltd., will be terminated. Accordingly, we inform you in advance of the termination of the trademark license agreement and its schedule as follows.”
Despite the efforts taken to prevent leading exchanges from being de-banked, they still face the possibility of being denied registration with the Korean Financial Intelligence Unit. The reason is that Since banks are still analyzing the hazards related to crypto businesses.
Nonetheless, the Bank of Korea expects to complete the contract with Ground X by the end of the month, with the trial beginning in the following month.