Busan Blockchain Regulatory Free Zone Expands to Real Estate and Medical Service Sectors

Addition of Finance (Real Estate) and Medical Sectors to Logistics, Tourism, Public Safety, and Finance (Digital Voucher) Pilot Projects

Conceptual diagram of the demonstration project.
[Graphic by Ministry of SMEs and Startups]

[Asia Economy Reporter Kim Jong-hwa] The Ministry of SMEs and Startups announced that it will commence demonstrations of the 'Real Estate Collective Investment and Profit Distribution Service' and the 'Medical Personal Information (MyData) Non-face-to-face Platform Service' in the Busan Blockchain Regulatory Sandbox Special Zone starting from the 15th.

This demonstration is being promoted to conduct additional demonstrations in the financial (real estate) and medical sectors, which were newly designated in addition to the logistics, tourism, public safety, and finance (digital voucher) demonstration projects of the Busan Blockchain Regulatory Sandbox Special Zone, which was first designated in July 2019.

The 'Real Estate Collective Investment and Profit Distribution Service' is a service that creates a public offering fund investing in real estate within the Busan area, issues blockchain-based digital certificates (tokens), sells them to the general public, and allows trading between individuals.

This demonstration will verify the effectiveness of the distributed ledger method that does not go through a central authority by operating both the existing electronic registration method under the Electronic Securities Act and the blockchain distributed ledger technology-based transaction method in parallel on a blockchain distributed ledger-based trading platform.

If this service is activated, it is expected to create an environment where the general public can invest in real estate with small amounts and seek profits through the formation of blockchain-based real estate public offering funds.

Additionally, by utilizing the distributed ledger technology characteristic of blockchain, all participants on the trading platform can participate to ensure reliability and transparency, and transactions can be conducted through the platform without visiting securities firms or banks, thereby increasing convenience. Overseas, attempts such as securitization of real estate using blockchain and tokenization of financial products like REITs have been steadily made, but in Korea, there have been limitations in business execution due to legal restrictions related to finance.

For this demonstration, the trading platform company was allowed to enable financial asset transactions within the platform without obtaining a financial investment business license, and was exempted from the obligation to list securities on the securities market within 90 days from the date of initial issuance, among other temporary exceptions during the demonstration special period.

Furthermore, to ensure safety in investor protection, which was the main focus, consultations on 11 ancillary conditions proposed by the Financial Services Commission, including physical facilities, securing professional personnel, business regulations, and liability insurance, have been completed.

The 'Medical Personal Information (MyData) Non-face-to-face Platform Service' is a blockchain-based non-face-to-face service that collects and utilizes medical data that individuals have consented to and pseudonymized, providing benefits.

All medical data applies blockchain technology to prevent forgery and alteration and to manage the provision, storage, and utilization history transparently and reliably.

The owner of the personal information (MyData), who is the medical subject, can check and manage their medical information usage history through a blockchain-based app, and when data demanders such as pharmaceutical companies and research institutes request it for purposes such as new drug development and healthcare, pseudonymized medical information safely stored on the blockchain can be provided.

Data owners who provide medical data receive digital vouchers linked to the Busan Regulatory Sandbox Special Zone as compensation for providing information, which can be used at locations within Busan. This demonstration of the medical personal information (MyData) service has been granted exceptions such as allowing corporations to be appointed as patient representatives and enabling corporations to apply for non-face-to-face viewing and issuance of medical record copies.

Lee Sang-seop, Director of the Regulatory Sandbox Division at the Ministry of SMEs and Startups, said, "Following the previous demonstrations in regional strength industries such as marine and logistics, we hope that through additional demonstrations in the real estate and medical fields, the blockchain regulatory sandbox will come closer to citizens and activate the blockchain corporate ecosystem in Busan."

This content was produced with the assistance of AI translation services.