Portal sites stretching out to cryptocurrency
By Kang Seung-woo
The nation’s web portal rivalry is expanding to cryptocurrency, raising expectations the main portals will release their own virtual coins soon.
According to Kakao, operator of Korea’s most popular messaging app Kakao Talk, it is planning to launch an affiliate focusing on blockchain technology, tentatively named “Kakao Blockchain.”
Blockchain technology powers cryptocurrencies such as bitcoin.
Jason Han, the chief technology officer of startup accelerator Futureplay, has been appointed as CEO.
However, the Pangyo-based firm said specific plans for the subsidy have yet to take shape.
“When to establish and what to do are under discussion,” a Kakao official said.
Kakao’s engagement in the cryptocurrency sector is a familiar scene.
The company already uses a blockchain-based mobile authentication service in its mobile payment platform Kakao Pay. In addition, it holds a 20 percent stake in Dunamu operating the nation’s largest cryptocurrency exchange.
Market observers speculate the blockchain affiliate could enable Kakao to mint its own crypto coin soon, hinting it will pursue an initial coin offering (ICO) in the end.
However, holding an ICO is still outlawed in Korea due to the government’s moves to curb speculative cryptocurrency investments. Kakao is anticipated to seek an ICO in other countries such as Singapore or Hong Kong.
The subsidy plan came after its cross-town rival Naver’s Japanese subsidiary Line also established a cryptocurrency subsidy in January.
Line Financial will let users exchange digital tokens and blockchain-based advanced financial services. Line is a messaging platform operator and game developer.
The Japanese government has a flexible stance on crypto coins, so the company could face less regulatory pressure there than in Korea.
Line has applied for a license to run a virtual currency exchange in Luxembourg and it is also said to consider expanding its cryptocurrency operations to Hong Kong.
Ahead of the Korean companies, global messaging app provider Telegram raised $850 million in the first part of its ICO -- above the initial target of $600 million.
Both Kakao and Line are engaged in a variety of content businesses such as emojis, games and music, so their own digital coins will be used in multiple ways.
Their own currencies will help those companies collect users’ payment data and reduce costs on commissions going to credit card companies and payment gateway services.
In addition, money raised from ICOs could be spent on R&D for next-generation technologies such as artificial intelligence and autonomous vehicles, which will help them build up their lead in hard-fought competitions with global players.