Deputy Prime Minister and Finance Minister Hong Nam-ki. (Yonhap)
South Korea will allow consumers to receive foreign currencies via non-face-to-face delivery services, to induce competition among service providers and promote innovation, the nation’s fiscal chief said Thursday.
The government will also seek to commercialize urban air mobility services, such as drone taxis, to alleviate the ground traffic congestion and create a new growth engine for the economy.
“Innovation in the foreign exchange sector has recently expanded beyond mere procedural deregulations,” said Deputy Prime Minister and Finance Minister Hong Nam-ki in a meeting of economy-related ministers on innovative growth strategy, held at Seoul Government Complex.
“In order to trigger (fair) competition among forex service providers and to attract new ones into the market, (the government) will expand the range of exchange and remittance operations for brokerages and credit card companies.”
The action is part of Seoul’s continued policy efforts to revive the stalled economic growth and promote contactless business sectors amid the fallout of the COVID-19 pandemic.
Under eased rules, forex service providers will be allowed to consign their exchange or remittance operations to a third party, which means that banks may deliver foreign currencies to customers via delivery services and other transportation means.
When a new forex operator starts business in the market, the government will make a review within 30 days to check whether the company is subject to the deregulations.
Concerning the latest change of rules, authorities are set to complete the revision process for the enforcement decree of the Foreign Exchange Control Act by end-September, Hong added.
In a separate action to trigger new growth engines, the government vowed to review measures to commercialize drone taxis and other urban air mobility services by 2025 -- under the “K-UAM” road map.
“The global UAM market volume is anticipated to reach 730 trillion won ($600 billion) by 2040,” the finance minister said, urging Asia’s fourth-largest economy to gain an upper hand in the lucrative business.
While technical development and commercialization should be steered by the private sector, the government will be in charge of providing the necessary infrastructure and the licensing and examination system, he said.
Addressing the hospitality and tourism industries that were hit severely by the epidemic crisis, the fiscal chief also pledged to build a social compromise mechanism in controversial business sectors such as shared accommodation.
“The key point is to establish a platform that provides a professional group of neutral arbitrators and a list of various alternative options,” the minister said.
So far, the shared lodging service, such as that provided by US-based Airbnb, is exclusively allowed for use by foreign tourists. The yearslong legislative move to eliminate this restriction has faced objection from the conventional lodging industry.
By Bae Hyun-jung (email@example.com)