Bloomberg reported on Monday that South Korea plans on issuing digital identities encrypted by blockchain with smartphones to citizens in 2024 to boost its economic development. The South Korean government stated that with the growth of the digital economy, the ID implanted in the smartphone is an essential emerging technology for supporting the development of data.
With digital identity on the blockchain, the network verification process will be simplified and users will be able to log in without a certificate or a verification code sent by text. Widespread use based on digital IDs is expected to boost government efficiency by saving more administrative manpower and time, decreasing wage fraud, expanding consumer credit, enabling trade, and generating new markets.
As an alternative, other applications of digital IDs include access to online medical services; Hotel check-in using a smartphone; prevention of ID fraud and theft; remote approval of contracts; fast boarding, etc. McKinsey & Company has faith that introducing digital IDs can boost the gross domestic product (GDP) of a country by as much as 13% and decrease business costs by trillions of dollars.
Citing Hwang Seogwon, an economist at the Korea Institute for Science and Technology Policy, has stressed the importance of risk assessment by saying that digitals IDs can generate huge economic advantages in finance, healthcare, taxes, transportation, and other areas and may catch on fast among the Korean population. In the meantime, Suh Bo Ram, head of the Korea Digital Government Bureau, has stated that South Korea could take a yield of at least 60 trillion won ($42 billion) in economic value within a decade from the plan, which is close to 3% of the national GDP of South Korea.
In addition, South Korea wants to adopt the digital identity system for 45 million people within two years. Under the plan, the government will not be able to access information that is stored on individuals’ mobile phones. This includes details on whose digital IDs are in usage and how and where they are used, as the system will depend completely on blockchain technology-based decentralization identity.
