South Korea plans blockchain-based digital IDs, joining other technologies aimed at boosting the economy

Citizens with smartphones will be able to use the digital IDs in the country, which ranks No 1 in applying technology to everyday life, business and government

Korea could reap at least US$42 billion, or 3 per cent of GDP, in economic value within a decade, according to the digital-government bureau

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Commuters stand on a platform as they wait to board a Korea Train Express in Seoul on October 14, 2022. Photo: AFP

Published: 10:36am, 17 Oct 2022

South Korea plans to offer a digital identity secured by blockchain to citizens with a smartphone as it taps into the world’s most tech-savvy population to boost economic growth.

Smartphone-implanted IDs are among the latest emerging technology underpinning a digital economy that has expanded as more people work from home, make cashless payments and explore the metaverse.

Digital IDs simplify verification on the web, removing the need to photograph certificates or log in via authentication codes sent by text. Instead, activities like applying for state benefits, transferring money or even casting a vote are just a pin or fingerprint away.

“Digitals IDs can yield huge economic benefits in finance, healthcare, taxes, transportation and other areas and may catch on quickly among the Korean population,” said Hwang Seogwon, an economist at Korea’s Science and Technology Policy Institute.

“But there has to be more risk assessment technologically to make sure the danger doesn’t outweigh the benefits,” he said.

The World Bank calls digital IDs a “game-changer” and McKinsey & Co sees their potential to increase a nation’s gross domestic output by up to 13 per cent and cut business costs by trillions of dollars.

McKinsey’s estimate is based on wide take-up of digital IDs, saving time in administrative work, reducing payroll fraud, expanding consumer credit, facilitating trade and spawning new markets.

“Every service that hasn’t been able to fully transition online will now be able to do so,” said Suh Bo Ram, director general of Korea’s digital-government bureau, who is spearheading the plan.