(Note: theloop and DAYLI Intelligence are the companies behind the ICON Project)

The interest in digital currency in the banking sector is growing as Woori Bank announced its plans to issue its own digital currency using the blockchain technology. This is because it is the first attempt among domestic banks and also viable alternative to the current limitations of membership points or rewards programs offered by financial companies.

On January 16, Woori Bank signed a business agreement with DAYLI Intelligence and theloop, a blockchain technology company, for the blockchain and digital money business, and announced that it will launch blockchain technology ID verification and digital currency trial by the end of the year.

The blockchain technology is applied to Bitcoin and Ethereum, representative digital currencies, as the technology that can prevent hacking when trading with digital money. However, Woori Bankโ€™s digital money is different.

The blockchain is divided into a public blockchain designed for digital currency transactions that can be used by everyone, such as bitcoin, and a private blockchain, which shares a limited network of participants. Woori Bank plans to use a private blockchain.

Accordingly, unlike bitcoin, which has a high price volatility, it is recommended to use the face value issued by the bank and its affiliates together. It is also the same reason to use the membership point โ€œWeBee Honeyโ€ for the new digital money. In the early stage of launch, users may not feel much different from existing membership points.

However, the biggest change due to the application of blockchain technology is scalability beyond the limits of existing membership points. Currently, major financial companies launch their membership points, and then integrate their points among group affiliates and increase their affiliates. However, the utilization of these membership points by financial consumers is extremely low. In fact, the number of credit card points expired in 2015 is estimated at 13.3 billion.

On the other hand, Woori Bank is expected to improve these problems through the introduction of blockchain technology. A Woori bank official said, โ€œCurrently, we have to install dedicated leased lines every time we expand our affiliates. If the alliance targets go beyond the domestic market to overseas, the cost scale will be snowballed. If you use it, you can use the Internet to dramatically reduce this cost. As the alliance grows, the use of new digital currencies improves dramatically, as well as the reduced costs of leased lines.โ€

Woori Bank plans to commercialize digital currencies as the first target of Woori Bankโ€™s main university next year after passing through technology verification (PoC) of digital money in the year. For example, if a university pays a scholarship of 1 million won, the school will pay 1 million won to Woori Bank and Woori Bank will issue 1 million won to students with digital money. However, students can only use this scholarship to the place where Woori Bank has previously cooperated. The use of the partnership may be limited to a place where the purpose of the scholarship can be saved.

The first goal of the university was to take into account the fact that Woori Bank has a lot of business relationships with major universities compared to other banks and that young people are sensitive to digital money use and related benefits.

One bank official said, โ€œWoori Bankโ€™s blockchain-based digital currency issuance is expected to overcome the limitations of current membership services and improve the availability of real money as a complementary component. As long as it can be used wherever possible, if it is settled successfully, it will be useful in the future global advancement of the bank.โ€