November 26, 2024

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In this photo provided by LG Electronics on March 16, a model is seen walking past a digitally minted version of artist Kim Whan-ki‘s “Universe” displayed on LG Electronics’ organic light-emitting diode TV screen. Nonfungible tokens for three versions of “Universe” fetched 194 ether ($609,600) combined at an auction earlier this week, according to Seoul Auction Saturday. (LG Electronics)

South Korean business giants are venturing into the fledgling digital asset market and blockchain-related operations as they seek new business opportunities.

On Friday, Ryu Young-sang, chief executive of SK Telecom, said in a shareholders meeting that the company plans to “adopt an economic system” to its own metaverse platform called ifland, a sign that digital currency tradable in the virtual world ecosystem could play a role.

The news is in line with an announcement earlier this week from SK Square, SK Telecom’s investment affiliate. SK Square said it was working with partners to build a blockchain-based service and would communicate with the market as its plan to issue a digital currency materializes.

SK Telecom is Korea’s largest carrier by mobile subscribers in Korea. SK Square, an SK Telecom spinoff, is the second-largest shareholder of Korean digital asset exchange Korbit, with a 35 percent stake.

This comes against the backdrop of “compartmentalized” metaverse platforms by telecommunication firms across the world.

Ryu told shareholders that metaverse platforms around the world “could be potentially standardized under SK Telecom’s ifland platform,” the international version of which was first introduced at Mobile World Congress 2022. He added that SK Telecom is in talks with telco firms in Europe, Asia and the Middle East for such collaboration.

Also, on Thursday, LG Electronics shareholders approved revisions to the articles of incorporation to add blockchain and virtual asset business to the objectives of the company.

The revision will open the doors to new businesses for LG Electronics, ranging from development and sales of blockchain-based software to transactions and brokerage of virtual assets. LG has yet to further explain ways on how it would achieve the long-term business goal.

LG has been considered one of the players in nonfungible tokens. LG’s signage played a role in displaying digital artwork through a subscription service, as data related to digitally minted art is stored in the form of NFTs. LG has worked with Florida-based digital art platform Blackdove for the service.

To broaden its NFT horizons, LG has partnered with Korean internet giant Kakao’s blockchain arm Ground X to offer an NFT storage service via a digital wallet, as well as Seoul Auction’s online arm.

LG Electronics’ plan did not come about overnight. In 2020, LG Electronics launched the in-house blockchain research arm iLab. LG then also joined the Hedera Governing Council as the sole home appliance manufacturer to explore use cases of the Hedera Hashgraph distributed ledger platform.

Samsung Electronics, LG’s global TV rival, also unveiled an app during the Consumer Electronics Show 2022 in Las Vegas, with which its TV users would be able to purchase and trade units of digital art.

Experts say such digital asset announcements by Korean conglomerates might change the way the public thinks about virtual assets in Korea.

“Korean business conglomerates’ foray into virtual assets will not only liven up the market, but also contribute to building public trust toward virtual assets,” said Oh Jong-wook, chief executive officer of Seoul-based cryptocurrency market index provider Wavebridge.

“In the past, virtual assets were considered a means of speculative investment, but more real-world use cases in the field of art and games show virtual assets could become a means of storing value.”

As of end-2021, all 1,257 virtual assets listed on Korea-based cryptocurrency exchange houses saw their combined market cap reach 55.2 trillion won ($45 billion), according to data from the Financial Services Commission. Daily virtual asset transactions came to 11.3 trillion won on average during the second half of 2021. These are the first government estimates related to the virtual asset market.

Korea’s crypto asset market is expected to see an annual growth of 20 percent a year to 2026, according to a projection from Boston Consulting Group Korea. 

By Son Ji-hyoung (consnow@heraldcorp.com)