Chaebol subsidiaries are actively moving into blockchain business while blockchain startups are reducing or closing business. Most active are Samsung SDS, LG CNS, Hanwha CNS, Lotte, and KEB Hana Bank.
These big-name companies have joined the Enterprise Ethereum Alliance (EEA), of which members include Forbe’s top 500, including Microsoft, JP Morgan, and Intel. They also joined the Hyper Ledger project, which IBM and other global enterprises have initiated. It is an open blockchain platform whereby industries from banking to manufacturing could use.
Samsung SDS has been developing a blockchain-based export clearance system for the Korea Customs Service. LG CNS has made public its blockchain platform called Monachain. Monachain could be used for issuing and managing mobile gift cards and corporate document certification.
The Lotte Group has decided to invest in blockchain projects, especially for upgrading its distribution and retail business.
The government also support the blockchain technology. It provides up to 40 percent of tax exemption for small companies’ research and development (R&D). Big companies could enjoy up to 30 percent of tax exemption on R&D.
The market seems to adjust business direction according to the government’s policy. The government has adopted a dual policy of supporting the development of blockchain technologies while cracking down cryptocurrencies and initial coin offerings (ICOs).
Up until last year, many blockchain startups have been preoccupied with raising capital through ICOs although they have yet to develop viable and disruptive technologies. These startups believed that once you raise money, you could develop eye-catching technologies. However, the government maintained the position that without a viable technology, you would have difficulty in raising capital.
Like Samsung, LG, Hanwha, and Lotte, chaebol would focus on developing blockchain technologies, which would raise the corporate value and attract investors. This `virtuous cycle’ would ease the government’s cynicism on blockchain developers and startups, a Seoul analyst said.
