Quick Summary:
- The government will allow smartphones to replace existing identification cards.
- Approximately 3% of Korea’s GDP is attributed to digital IDs.
Related: Japan to Invest in Metaverse, NFTs and Web3 Services
In an effort to boost economic growth, South Korea plans to offer a digital identity secured by blockchain to citizens with smartphones.
With more and more people working from home, making cashless payments, and experimenting with virtual worlds. Smartphone-implanted IDs are one of the latest emerging technologies.
Instead of photographing certificates or authenticating via text, digital IDs simplify verification on the web. Activities like applying for state benefits, transferring money, or even voting are just a pin or fingerprint away.
The Digital Revolution
Depending on the maturity of the economy, digital IDs offer varying benefits.
“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 Korean Science and Technology Policy Institute economist Hwang Seogwon.
McKinsey & Co. believes digital IDs can increase a nation’s gross domestic product by up to 13% and reduce business costs by billions. The World Bank calls digital IDs a “game-changer.”
A financial estimate by McKinsey is based on a large uptake of digital IDs, reducing payroll fraud, facilitating trade, and expanding consumer credit.
“Every service that hasn’t been able to fully transition online will now be able to do so,”
according to Digital Government Bureau director-general Suh Bo Ram.
According to him, Korea can reap at least 60 trillion won ($42 billion) in economic value within a decade.
To identify themselves, Koreans rely on resident registration cards – similar to social security cards in the US. An app would embed these IDs into mobile phones.
Digital IDs Will Include:
- Providing online medical services without requiring in-person visits to doctors
- Using smartphones to enter hotel rooms instead of kiosks
- Identifying and preventing ID theft and forgery
- Remotely approving contracts without signing them
- Enhancing airport fast-track boarding
Since the system relies entirely on decentralized identity, an advanced strand of blockchain technology, the government will not have access to information stored on individual phones, including details on who uses their digital IDs, how they are used and where.
Blockchain is a digital log of data that can be verified by devices on the network whenever it’s updated. The possibility of theft is reduced due to the absence of a central server storing information, so hackers would have to break into each device to manipulate data.
Conclusion:
By 2024, Korea will launch digital IDs and aims to have 45 million citizens adopt them within two years. However, each individual will still need to visit a town office for registration card renewal and pay fees.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
