A local report confirmed that Busan, the second most populous city in South Korea, plans to use the Ethereum and Cosmos for its project “Blockchain City.” The Asian city has been developing its blockchain capabilities for a while and plans to double down on its efforts.
South Korea’s Blockchain City To Operate On Ethereum And Cosmos
The report claims the project is expected to be completed by 2026 as part of the Busan Digital Asset Exchange (BDAE) and Future Schedule Plan. The South Korean city has been experimenting with different implementations of blockchain technology.
Busan is looking for ways to offer services, such as digital vouchers and others, and for ways businesses can operate on the blockchain. However, the experiments hit an obstacle due to the difference between the networks and “uncomfortable user experience (UX).”
As crypto users know, operating on Ethereum and its many sidechains differs greatly from applications running on Cosmos, Cardano, Tezos, Solana, and other networks. These blockchains have transaction costs and speed and require tools many are unwilling to master.
Therefore, Busan decided to concentrate on Ethereum and Cosmos to standardize its blockchain initiatives. Implementing this “Blockchain City” will cost around 100 billion Korean won or $74 million US dollars. The project will operate around the BDAE.
Busan City’s Efforts To Contribute With Blockchain Technology
According to the report, the BDAE was launched in November 2022 but is yet to roll out operations. The company will disclose its business plans in an upcoming event this November.
The trading venues will provide users access to commodities, raw materials, and other assets via tokenized products. In the long term, the BDAE plans also to offer access to other assets, including tokenized global intellectual property (IP) rights.
Tokenized assets and related financial products have been gaining attention from different sectors. Banks, exchanges, and financial service providers have noted the potential benefits of implementing these products.
In a paper published on September 8, the US Federal Reserve (Fed) stated the following regarding the potential benefits of tokenization:
the programmability of crypto tokens and the ability to leverage smart contracts, allows for additional features that can be embedded into the tokenized asset which might also benefit markets for the underlying reference assets. For example, liquidity saving mechanisms could be implemented in the settlement of the tokenized asset even if they are not implementable for its real-world counterpart.26 These attributes might lower barriers to entry for a wider set of investors, resulting in more competitive and liquid markets, and better price discovery.
In addition to the “Blockchain City” and the BDAE, Busan will launch a blockchain innovation fund. The initiative will support the development of blockchain technology and related infrastructure.
As of this writing, Ethereum (ETH) trades at around $1,600 and faces considerable selling pressure on short timeframes.
Cover image from Unsplash, chart from Tradingview