South Korea will allow consumers to receive foreign currency through non-face-to-face delivery services, to induce competition among service providers and promote innovation, the country’s chief financial officer said on Thursday.
The government will also try to commercialize urban mobility services for cities, such as drone taxis, to alleviate land congestion and create a new growth engine for the economy.
“Innovation in the currency sector has recently been expanded beyond just procedural deregulation,” said Deputy Prime Minister and Finance Minister Hong Nam-ki at a meeting of finance-related Ministers for Innovative Growth Strategy held at the Seoul Government Complex.
“To trigger (fair) competition among forex service providers and to attract new ones to the market, the (government) will expand the exchange of exchange and transfer operations to brokerage firms and credit card companies.”
The action is part of Seoul’s continuing political efforts to revive the stalled economic growth and promote contactless business sectors amid the fallout of the COVID-19 pandemic.
Under light rules, forex service providers will be allowed to send their exchange or transfer operations to a third party, meaning that banks can provide foreign currency to customers through delivery services and other means of transport.
When a new forex operator starts business in the market, the government will conduct a review within 30 days to check if the company is subject to the deregulations.
As for the latest change to the rules, authorities are set to complete the review process for the Enforcement Decree for the Exchange Control Act by the end of September, Hong added.
In a separate action to trigger new growth engines, the government promised to review measures to commercialize drone taxis and other urban mobility services by 2025 – under the “K-UAM” roadmap.
“The global UAM market volume is expected to reach 730 trillion won ($ 600 billion) by 2040,” the finance minister said, urging Asia’s fourth largest economy to gain an edge in the lucrative business.
While technical development and commercialization should be guided by the private sector, the government will be responsible for providing the necessary infrastructure and the licensing and investigation system, he said.
The fiscal chief addressed the hospitality and tourism industry hard hit by the epidemic crisis, and also pledged to build a social compromise mechanism in controversial business sectors such as shared accommodation.
“The key point is to establish a platform that provides a professional group of neutral arbitrators and a list of various alternative options,” the minister said.
So far, the shared accommodation service, such as that provided by US-based Airbnb, is only allowed for use by foreign tourists. The annual legislative move to remove this restriction has been the object of the traditional lodging industry.
By Bae Hyun-jung (email@example.com)