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‘Regulation, Funding and Uncertainty’ Rock S Korean Blockchain Market

Adoption

Blockchain

South Korea

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Tim Alper

Author

Tim Alper

About Author

Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

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Last updated:

August 24, 2023

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South Korea’s blockchain industry is experiencing teething issues – while only 20% of domestic blockchain-related companies are actually selling anything, per reports.

Source: iStock/narvikk

While some of the country’s biggest IT giants and banks forge away with big-name blockchain products and services this year, blockchain startups are beginning to struggle, according to an Fn News report.

The media outlet reports that some of the early-moving companies that scored big with initial coin offerings (ICOs) circa 2017 are now struggling financially.

The report gives the example of HYCON, a PoW (Proof-of-Work)-based blockchain platform that makes use of the HYCON token. In 2017, HYCON (HYC) was trading for some USD 0.08 per token – a figure that has fallen as low as 0.005 per token in recent months. Another token, Icon (ICX), was trading at up to USD 5.37 in March last year. The same coin is currently trading at around USD 0.17.

Fn News says the industry blames three factors for the decline in business:

Regulatory issues pertaining to the use of cryptocurrency in South Korea
Lack of funding
A market slowdown

The same report also alleges that many blockchain-powered local stablecoins are displaying “growth limitations,” and have effectiveness problems, as well as low utilization – despite many reports to the contrary.

Fn News quotes an IT professor as stating,

“Getting people to pay using cryptocurrencies instead of cash or debit/credit cards […] is very difficult in the current regulatory climate – especially when there are also funding issues to navigate.”

Meanwhile, Herald Kyungjae reports that only 20% of South Korea’s blockchain ventures have commercialized their products – with 80% of companies still yet to post any sales figures.

The media outlet reports that a recent survey of Industry 4.0 firms in South Korea conducted by the Software Policy & Research Institute found that just 44 of 198 blockchain-related companies had commercialized their products – lagging way behind other Industry 4.0 tech companies.

By contrast, 76% of smart factory, smart home and driverless vehicle industries have released commercial products, as have 50% of AI-related industries.

The same companies stated that their biggest business hurdle was a shortage of funds and investment, with 19% of respondents saying they were “uncertain about demand and profitability.”