'Cryptocurrency can be major payment option'

HTS Coin CEO expects digital money to expand clout

By Kang Seung-woo

Payments with bitcoin or other cryptocurrencies are not exactly becoming commonplace, but a growing number of shops and restaurants accept the virtual money across the world.

Korea is no exception as the nation’s largest underground shopping center, Goto Mall, has added bitcoin to the list of payment methods alongside cash and credit cards. Goto Mall used to be known as Gangnam Terminal Underground Shopping Center, with foreigners making up 20 percent of its visitors.

In November, Goto Mall and local cryptocurrency exchange HTS Coin reached a partnership deal, under which bitcoin is accepted at the 620 stores in the mall through the HTS’ industry-first payment system.

“Cryptocurrencies are mainly a store of value and investment vehicle right now, sparking fears of a giant crypto-bubble,” said Shin Dong-hwa, representative director of HTS Coin in a recent interview with The Korea Times.

“As I had envisioned virtual currencies in the form of bartering, I convinced Goto Mall to accept bitcoin as a payment option. Our vision is to put cryptocurrencies in circulation so they can be used as money in real life.”

Along with Goto Mall, the Seoul-based exchange is also partnering with golf apparel company Dennis Golf and beauty-related associations that have 100,000 members for bitcoin acceptance.

Although bitcoin has become a global household name, many retailers have been hesitant to accept the digital token as an approved payment method due to its volatility.

For example, the leading cryptocurrency tumbled nearly 30 percent in the morning session, Dec. 22, but recovered most of its ground in the afternoon, prompting warnings by experts of excessive volatility.

But Shin said his company’s adoption of Home Trading System (HTS) can help ease such concerns. HTS is commonly used in stock trading and shows off fast order speed and quick yet stable handling of massive amounts of data.

“If retailers take bitcoin payments and do not convert them to a traditional currency immediately, fluctuations of its values can do harm to their businesses,” he said.

“On the contrary, Goto Mall owners can receive cash within a second after transactions regardless of fluctuations thanks to the HTS system.”

He added his firm focuses on creating an eco-system where cryptocurrencies are practically used by people every day rather than the present practice where people are just interested in how much they can make from trading them.

“It is a totally different concept that people have seen in cryptocurrency exchanges.”

Some exponents of cryptocurrencies also buy into the idea that if they become used as a currency more broadly, they could establish themselves as a tool for payment, helping their value remain much more stable.

Currently, HTS Coin’s partners only take bitcoin, but payments with other major crypto coins such as Ethereum and Ripple will be available soon, he said, adding that there are no technical difficulties.

Amid the cryptocurrency frenzy in Korea, the government has ramped up regulations to cool the overheated trading in the world’s third-largest market after the United States and Japan. One of its measures is to ban anonymous cryptocurrency accounts beginning this year.

In addition, the government is refusing to acknowledge digital tokens as a legitimate currency.

However, Shin believes cryptocurrencies would function as a means of payment at the end of the day.

“Many cryptocurrency critics, including government officials, say we have to crack down on speculation with digital money because the Chinese and Indonesian governments did so. But we have not benchmarked systems of those countries. We followed those of the U.S. and Japan,” he said.

“The government said it was considering shutting down exchanges nationwide, but if so, 300 trillion won in the market capitalization will be gone, which will leave a huge problem to deal with. In that respect, relevant legislation will also take longer, so the easiest measure is to tax cryptocurrency transactions, which means acknowledging them as a currency.”

Global information technology companies’ recent moves are also backing up Shin’s view about the future of virtual currency.

Amazon recently purchased three crypto-related domain names _ a strong indication that the world's largest e-commerce company is considering cryptocurrency payments in the future.

Auction bidding pioneer eBay is also “seriously considering” accepting bitcoin, according to a report last month, while Facebook’s CEO also expressed his interest in crypto currency. This raises speculation that the world’s most popular social networking platform may integrate crypto coins into its payments.

“Amazon has its own mobile payment platform in Amazon Pay, which incurs high credit card fees. Hence, I guess those companies including Amazon may consider creating their own cryptocurrencies in the end that will help ease their financial burdens,” he said.

Cryptocurrency works on a decentralized platform, making it easier to transfer funds between two parties in a transaction at minimal processing fees instead of high fees by central banks and credit card firms.