Blockchain-based remittance service excluded from 2nd sandbox review

Industry shows disappointment, hitting out at discord among ministries

[서울경제] Blockchain-based overseas remittance service provider MOIN has been excluded from the list of companies subject to the second review of the “regulatory sandbox” in the ICT (information and communication technology) segment of the Ministry of Science and ICT (MSIT).

According to the MSIT Wednesday, the second review committee of the regulatory sandbox confirmed five projects as those subject to its review but MOIN’s blockchain-based overseas remittance project has been excluded from the list like it was in the first review.

MOIN had applied for temporary permission and test exception for its blockchain-based service under the regulatory sandbox system. The blockchain startup wanted its overseas remittance service using blockchain to be registered as a small-sum overseas money transmitter.

In its announcement on the results of the first review in February, the MSIT also excluded MOIN from the review list, stating that government agencies needed more discussion.

“We hoped that the government would pay attention to the innovation grafting blockchain technology onto overseas remittance but it’s pitiful to see our application excluded repeatedly,” said a MOIN official, adding that “we have to wait for the regular screening now.” “We expect the next review to take place in April and are still hopeful about the ministry’s position to keep the opportunity for dialogue open.”

Having counted on the sandbox, the blockchain industry also showed disappointment. An official at another blockchain-based remittance startup said, “MOIN’s move drew much interest in accordance with the government’s eagerness to nurture blockchain. We realize high walls of regulation as MOIN’s entry into the sandbox becomes uncertain.”

Another industry official said, “Application for the regulatory sandbox resulted in ideas on the service being exposed while receiving nothing in return.” “This incident might prompt other blockchain companies to refrain from knocking the door of the sandbox.”

Some analysts speculate that the discord among relevant agencies is a hindrance to MOIN’s entry into the sandbox. “MOIN is known to have had much discussion with officials of the Ministry of Economy and Finance (MOEF). We counted on the ministry but it’s highly likely that MOIN’s application was rejected because of the disagreement in interpretation with related ministries like the Financial Services Commission (FSC) over their turf war,” an analyst said.

MOIN asked its overseas remittance limit to rise from the current $3,000 per case and $30,000 a year to similar levels applied to commercial banks. The blockchain industry appears to believe that FSC, MOEF, MSIT and other ministries failed to reach an agreement on the increase of the limit and excluded MOIN from the review list.

As the chances of remittance’s entry into the sandbox become uncertain, there is skepticism about the FSC’s sandbox review. Three services using private blockchain have been filed with the FSC’s sandbox for April. “If the word ‘blockchain’ is inserted, the relevant service is likely to be excluded. We will have to wait to see how the service providers will react,” a blockchain expert said.

Meanwhile, the MSIT had selected four projects for its first review: installation and operation of hydrogen stations in urban areas, tailor-made healthcare service through DTC (direct to consumer) dielectric analysis, digital bus advertisement and application-based electric vehicle recharging. For the second review, such projects as movable virtual reality (VR) experience trucks, mobile-based used car quotation comparison service, motor bike advertisement using digital delivery box, smart electric vehicle recharging socket and maritime disaster warning system for lifesaving were proposed. /edshin@decenter.kr