Busan city drops global crypto exchanges from its digital exchange plans

FTX was one of the key exchange partners for Busan city, but its recent collapse made the administration reconsider its plans of onboarding third-party crypto exchanges.

Busan, the blockchain city of South Korea, has moved a step closer to forming a local crypto exchange, but it has dropped most of the global centralized exchange partners. The drastic decision comes in the wake of the recent colossal failure of centralized exchanges.

The city announced the steering committee comprising 18 local blockchain experts but none of the five exchanges that had agreed earlier this year to assist the city in establishing its first official digital asset exchange. The five exchanges included Binance, Crypto.com, Gate.io, Huobi Global and FTX.

The steering committee is a municipal advisory body tasked with providing advice on the establishment and operation of the digital asset exchange, as well as strengthening the system of external cooperation.

The possible elimination of global crypto exchanges from Busan city’s plan was visible in the wake of FTX’s meltdown. The city administration was having second thoughts on the inclusion of such private exchanges in their plans but was confident of moving ahead with their blockchain goals without the need for third-party assistance.

One of the committee members noted that the problems with the crypto exchanges such as “FTX and other major global exchanges seem to have influenced [the decision],” Another member said that the exchanges were never an integral part of the city’s plan and were only needed for offering initial liquidity.

Related: Largest South Korean Telecom Company Issues Blockchain-Based Local Currency in Busan

Busan City intends to establish an exchange that divides digital assets into securities and non-securities, as well as a market management organization in charge of listing and evaluation, market monitoring and supervision, and deposit and settlement. After creating an established fund in the first half of the next year, the city decided to recruit members.

In July 2019, Busan City was officially designated as a regulatory-free zone for blockchain technologies. The city plans to implement various blockchain applications in industries such as tourism, finance, logistics, and public safety. Since then, the local government has been actively pursuing its blockchain plans, announcing in late 2019 the development of a blockchain-based digital currency in collaboration with telecom giant KT.