Nick Chong · 1 week ago · 2 min read · Insights via Grayscale Investments
Korea › Adoption
Biggest Mileage System in Korea OKCashBag With 35 Million Users Will Use Cryptocurrency
OKCashBag, the biggest mileage and membership system in South Korea operated by SK – the country’s largest telecommunications conglomerate– is preparing to integrate major digital assets to incentivize users with cryptocurrency.
Motive Behind Cryptocurrency Integration
SK, the conglomerate behind OKCashBag, has been in support of the cryptocurrency and blockchain sector since 2013. As an early investor in Korbit, the third largest digital asset exchange in South Korea alongside Tim Draper and Softbank, SK continues to remain at the forefront of cryptocurrency development in Asia.
Hani, a major mainstream media outlet in South Korea, reported that SK is considering the integration of cryptocurrency on the OKCashBag platform as the next paramount initiative of the company targeted at the blockchain industry subsequent to the Korbit-SK era.
In September 2017, Korbit was acquired by the $10 billion parent company of gaming giant Nexon at a valuation of $120 million. While it remains unclear whether SK sold its stake in Korbit to NXC in late last year, local analysts reported that SK acknowledged its successful investment in Korbit and is planning to move onto the next ambitious cryptocurrency initiative.
On July 3, SKPlanet, the same subsidiary of SK that invested in Korbit, told local reports that the probability of OKCashBag integrating a stablecoin is higher than major assets like bitcoin and ether to prevent both users of the mileage system and the company from being affected by the highly volatile nature of digital assets.
An SKPlanet representative told Hani:
“OKCashBag has approved the initiation of OKX Project, a blockchain technology-based project, and is currently in a phase of reviewing various business models and incentivization methods. But, SKPlanet will not engage in any initial coin offering (ICO) or fundraising pertaining to OKX Project.”
As of July 2018, OKCashBag has more than 35 million members in its mileage and membership system – over half the population of South Korea.
OKCashBag is utilized by almost every airline, credit card company, restaurant, and merchant in South Korea to incentivize loyal clients and consumers. The integration of cryptocurrency by the membership system will immediately expose tens of millions of users in South Korea to the cryptocurrency sector.
SKPlanet has hinted the integration of stablecoins like Tether (USDT), but the controversy surrounding USDT for lack of transparency and audits, Hani reported that SKPlanet and OKCashBag will likely consider other stablecoins in the global market.
But, the audit and transparency report released by FSS, a Washington-based law firm that provides investigative and monitoring services to large institutions founded by former federal judges and former FBI director, which confirmed 1:1 backing of Tether to the US dollar could be sufficient to convince SKPlanet to integrate USDT.
The report of FSS read:
“In conjunction with receiving the above balance information, FSS requested the Chief Financial Officer and the General Counsel of Tether to certify, by sworn statement, the amount of fully-backed USD Tethers that were in circulation as of the close of business on June 1st, 2018. The amount certified to FSS was $2,538,090,823.52 USD Tethers”.
Regardless of which cryptocurrency the company ends up integrating, OKCashBag representatives confirmed it will not conduct any ICO or create a token for exchange listing.
“ICO, fundraising, and exchange listing are not being considered by SKPlanet and OKCashBag. We are integrating cryptocurrency to improve the current system of distributing incentives to users and to optimize other services, not for profits.”
Since OKCashBag already approved the project and plan of adding cryptocurrency to its platform, once business models and incentivization methods are properly outlined, they are set to integrate cryptocurrency as early as the fourth quarter of 2018.