The FTX collapse may likely become the worst crypto meltdown in history. In just one week, the contagion has spread across the crypto industry and host communities. It is pretty sad to mention that some crypto-focused firms may pack up due to the crisis. Crypto analysts believe it would take a long while for the digital asset space to recover from the blow.
Busan, South Korea’s second-largest city, which launched a blockchain initiative about four years ago, appears to have been affected by the FTX contagion. The city earned its name as South Korea’s blockchain city through its warm embrace of cryptocurrency technology.
Busan: Supporter Of Crypto And Blockchain Innovations
In August, the city administration launched a partnership with now-bankrupt digital asset exchange FTX. The partnership sought to build a local digital asset exchange to bolster blockchain development. As a result, Busan intends to become an Asian digital asset hub.
However, a local report revealed that Busan is now reconsidering its partnership with FTX due to the crypto exchange’s meltdown. The Busan government and financial authorities feel disturbed about the idea of a public-private digital exchange amid the FTX crisis.
A city official stated that it is unreasonable for Busan to continue establishing a digital asset exchange given the present conditions.
The city has been actively working to establish a local digital asset exchange in the past few months. It entered multiple partnerships with crypto exchanges, including Binance. The move resulted from Busan’s Mayor Park Hyung-Joon’s pledge to reduce the city’s tourism dependence and foster the growth of new technologies.
Busan also partnered with crypto exchange Huobi Global. The digital asset exchange has had an office in South Korea since 2019. Moving further with its pursuit to become a blockchain hub, Busan formed another partnership with Crypto.com.
It also signed a memorandum with Binance to provide a blockchain regulatory-free environment that will foster blockchain businesses.
Busan Will Continue To Utilize Blockchain, Says City Official
The South Korean city officially became a regulation-free zone for blockchain technologies in 2019. As a result, it adopted blockchain applications in various industries, such as finance, tourism, logistics, and public safety. Busan even inaugurated the development of a blockchain-based digital currency in partnership with KT, a telecom giant, in late 2019.
Busan has been involved in numerous projects to pursue its blockchain initiative further. One of them is the cooperation with Hyundai Pay, a local digital wallet developer. It also developed a blockchain-enabled virtual power plant.
Although the city is dropping its plans to create a local digital asset exchange, it has not backed out on its blockchain initiatives. A local official said they would explore various ways to make Busan a financial center using their designation as the blockchain regulation-free zone.
Featured image from Pixabay, chart from TradingView.com