The most popular mileage point program in South Korea is considering a plan to convert cash points collected by its users into cryptocurrency.
OK Cashbag, the oldest and most popular points program, was launched in 1999 by South Korean telecoms titan SK Telecom. The firm was launched to reward consumers who purchased services and goods from SK affiliated companies. SK Planet, the e-commerce subsidiary of SK Telecom, and the operator of OK Cashbag, say they plan to introduce a blockchain system that will tokenize cash points has been shared with management.
The plan also involves the creation of a stablecoin, one which will be tied to the Korean Won.
While the project is still subject to further research, the plan is notable given the firm’s userbase and the sheer number of stores where the rewards can be spent.
While SK Planet could not confirm the amount available in its reserve, the firm estimates the total amount of points in its system may be worth up to $100 Million.
However, the firm’s plans may run into a few regulatory issues even before it launches the program.
OK Cashbag’s rewards system is currently categorized by the South Korean government as a “prepaid electronic payment means.” Companies that offer this kind of service are required to obtain approval from the Financial Services Commission.
Another obstacle the firm could face is the lack of a regulatory framework for cryptocurrencies. The South Korean government is yet to pass any legal framework to regulate crypto in the country. The plan also needs to gain approval under the Electronic Financial Transactions Act before it can be launched.