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Saturday, September 23, 2023

How local currency can revive a nation’s economy

Photo: Collected

In this era of race toward economic excellence, every nation may face interlocking with a cluster of underperforming communities that hinders the expected growth. This indeed is an uphill challenge for every nation big and small to maintain a steady and competitive economic development growth in a global standard.

As radical an idea as it may seem, a local currency can empower the small communities by accelerating the socioeconomic activities and interactions with the citizens, and eventually, the money flow. This strengthens the social cohesion and thereby stimulates the transition toward a more prosperous and positive economic state.

There have been few cases of local currency implementations around the globe. It has been observed that these have brought positive impact on the economy of the country. One of the most successful case studies is the local currency implementation in South Korea. The economy of South Korea, an East Asian nation on the southern half of the Korean Peninsula, ranks 4th in Asia and 11th in the world. To keep this momentum up and marvel even beyond its current economic development, there has been a discernible shift toward adoption of local currency in last couple of years which can be deemed not only a timely move, but also a strategic element to overhaul the local communities.

KONA I Co., Ltd., the largest smartcard manufacturer and the provider of payment and security solutions in South Korea, has been leading the local currency bandwagon in the county. At the beginning of 2019, KONA I Co., Ltd. was selected as a joint operating agency in the local currency project for Gyeonggi, the largest and most populous province in South Korea with population of over 13 million (1 crore 30 lac); as well as cities of Incheon, Daejeon, Yangsan and Busan, in order to boost the local economy by empowering the local business communities and supporting small businesses. This also ensures that funds from special government programs are used appropriately and in small local businesses. This will see about $1.4 billion USD be used, through the KONA CARD platform, conceptualized and developed by Kona Software Lab Limited, the Bangladesh office of KONA I Co., Ltd., in programs such as youth allowances and childbirth support over the next 3 years.

In Incheon, the e-card is an electronic gift certificate introduced by Incheon city. The first of its kind, this mobile app based prepaid card platform was made for the purpose of revitalizing the local economy and small businesses. The card can be used in over 175,000 (99%) of merchants within Incheon excluding departmental stores, large-sized marts, and corporate supermarkets. Furthermore, it offers the user base payment incentive of 6 ~ 10% as a cashback point that can be stored and used in other valid stores.

Following the success in Gyeonggi, Incheon, Daejeon, Yangsan and Busan, KONA I Co., Ltd. has also signed agreements for KONA CARD service implementation with other local governments to provide an open, secure, and standardized mobile payment platform, thus expanding its penetration of the domestic market. The platform is also expected to launch overseas in near future, as its versatility can perfectly match the dynamic requirements set by potential international partners.


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