The South Korean city of Busan has been eagerly anticipating the launch of its blockchain-powered digital assets trading platform. As the world’s first city government-run exchange, it has set ambitious timelines to realize this goal by the end of 2023. However, despite facing regulatory challenges and a change in the platform’s scope, the city of Busan has taken a significant step forward by naming the Busan BDX Consortium as the preferred bidder in an operating tender.
Comprised of 11 companies, the Busan BDX Consortium is made up of small- and medium-sized firms, including IT businesses, financial institutions, and other Busan-based companies. Led by ITcen, a specialist in tech infrastructure and IT technology with a market capitalization of approximately $123 million, the consortium emerged as the preferred bidder over strong competitors like the gaming giant WeMade, the firm behind the WEMIX cryptoasset. While Wemade boasts a much larger market capitalization, the controversy surrounding WEMIX may have played a role in the consortium’s selection. Last year, WEMIX faced allegations of irregularities in token circulation data, leading to its delisting by the nation’s major crypto exchanges. Although most of these exchanges have since relisted the coin, the controversy surrounding WEMIX remains a concern.
Understanding the Local Ecosystem
Experts speculate that one of the key factors in the city’s decision to choose the Busan BDX Consortium is their stronger presence and understanding of the complexities of the local industrial ecosystem. Busan aimed to collaborate with firms that have a deep understanding of the region’s specific needs and the ability to navigate its unique challenges successfully. By selecting a consortium built around local expertise, Busan hopes to ensure the success of its blockchain-powered digital assets trading platform.
The next step for Busan is to present the launch of the platform to the Busan City Council for voting. Assuming the council approves, the Busan BDX Consortium will then enter into a business agreement with the city, expected to be finalized in January. As part of the agreement, the exchange operator will assume full control of operation and ownership, including investment in exchange facility costs. Meanwhile, the city will provide administrative and financial support to ensure the smooth operation of the exchange.
Shift in Scope
Originally envisioned as a crypto and securities token offering (STO) trading platform, the exchange encountered regulatory hurdles that forced it to reconsider its approach. The government’s reluctance to legalize STOs, despite previous commitments to do so, has frustrated major domestic firms eagerly awaiting opportunities to launch their services. As a result, the platform will initially focus on tokenized commodities, including precious metals, intellectual property rights, carbon emissions-related tokens, and certificates. The city plans to expand the scope of transactions on the platform in the long term.
The launch of Busan’s blockchain-powered digital assets trading platform is drawing closer, and the selection of the Busan BDX Consortium as the preferred bidder marks a significant milestone in its realization. By prioritizing local expertise and a deeper understanding of the region’s unique challenges, Busan aims to ensure the success of its city government-run exchange. Although the platform’s scope has shifted due to regulatory hurdles, Busan is optimistic about its future growth and the competitive products it will introduce to the market. As the city moves forward with its plans, the collaboration between public and private entities promises to unlock new opportunities in the blockchain and digital assets space.
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