President-elect vows to back Korea's science and tech sectors

Tech

Published: 13 Mar. 2022, 10:37

President-elect vows to back Korea's science and tech sectors

The prices of cryptocurrencies are displayed at the Bithumb customer center in Gangnam, southern Seoul, on Thursday. Excitement is building up in the tech industry as president-elect Yoon Suk-yeol emphasized his plans to make Korea a leader in science and technology during a speech on Thursday. [NEWS1]

Excitement is building up in the tech industry as president-elect Yoon Suk-yeol emphasized his plans to make Korea a leader in science and technology during a speech on Thursday.

“We will support innovation in the latest technologies to make Korea a leading country in science and technology, aiming to bring the slow-growing economy back on an upward growing spiral,” Yoon said.

From the beginning of his presidential campaign, the conservative People Power Party’s Yoon had been emphasizing the need to ease regulations to allow the private sector to lead the market.

Anticipation also grew with the possibility of ex-candidate Ahn Cheol-soo — who has been iterating the need for science and technology advancement — taking a senior administration position.

President-elect Yoon Suk-yeol, left, shakes hands with Ahn Cheol-soo at the National Assembly Library on Thursday morning. [YONHAP]

In fact, the first policy that Yoon and Ahn agreed upon, when Ahn dropped out of the race in favor of merging their presidential campaigns just days before the election, was a tech one, nicknamed the “555 Strategy,” which Ahn had been pushing for throughout his campaign.

The strategy aims to make Korea one of the five strongest economies in the world by developing five technologies much more advanced than any other states, leading to the birth of five companies as influential as Samsung Electronics.

Ahn had also vowed to name a deputy prime minister to head the science and technology field and hire a senior officer in the Blue House with scientific expertise.

Yoon’s tech promises were mainly centered around the three subjects most popular among the younger generation: cryptocurrency, start-ups and games.

The foremost agenda was to establish a new law to set guidelines for the burgeoning cryptocurrency market, tentatively called the Basic Digital Assets Act.

Cryptocurrencies are gaining momentum around the world, but there is no law in Korea that specifically deals with the new form of virtual assets. The act would contain clauses to protect investors, similar to that of the stock market, such as by prohibiting coin manipulation and setting up insurance programs to minimize damage in the case of getting hacked or experiencing system malfunctions.

Yoon also seeks to allow companies to issue cryptocurrencies and raise funding from investors. This is called initial coin offering (ICO), similar to initial public offering (IPO), and is currently illegal in Korea.

Income made from crypto of up to 50 million won ($40,000) will not be taxed.

The new government will look to set up a new command center to review and abolish around 80 business restrictions. During candidacy, Yoon vowed to change regulations from the current "positive" structure to "negative," to maximize flexibility and freedom for local companies.

Korea currently has what it calls a positive regulation system, which means laws and guidelines specifically say what companies can do, while anything not mentioned is prohibited. Conversely, negative regulations would list what companies can't do and allow everything else.

“Many administrations promised to change the regulations structure in the past, but they all failed,” said Choi Sung-jin, executive director of the Korea Startup Forum. “The new government must be different. It’s important they stick to the principles of the private-sector-led market policy.”

The president-elect vowed to allow multiple voting rights for non-listed companies so that these smaller businesses can draw major investments while still protecting their companies over large-scale investors. The expansion of government-led investment funds was also put on the agenda.

For the gaming sector, Yoon’s main focus is on bringing about absolute disclosure of the probability of in-game loot boxes in online games.

Random boxes, or loot boxes, are a common feature in local roleplaying games where users pay, oftentimes with real money, to draw items like weapons or armor. Different boxes of different values do different things, but there is always a small chance of an exceptionally good outcome. Game companies have been criticized for keeping those likelihoods a secret from the players.

The president-elect aims to create a gaming environment where companies are mandated to reveal those probabilities and users get the information they need in their gameplay.

Yoon also promised to expand Esports to rural areas by establishing region-based Esports teams and building new Esports arenas across the country.

However, he addressed the much-debated play-to-earn (P2E) games with caution. P2E games are online games that allow players to cash their in-game items into to real-life money through blockchain technology.

“I could put more thought toward them if a majority of the people agree, but cashable games must be treated with caution,” Yoon said.

BY KWEN YU-JIN, KIM JUNG-MIN AND YOON SO-YEON [yoon.soyeon@joongang.co.kr]