Two of South Korea’s big tech firms Naver and Kakao have been denied a license to operate in Singapore.
Eyes on blockchain technology sector
With exposure and extensive experience in the technology sector, Naver and Kakao were ready to cast their nets wider — in the blockchain sector.
While ethereum — the second-largest cryptocurrency is gaining traction, all eyes are glued to bitcoin. Some analysts predicted that its price might hit an impressive $100k this year. This has led to an increased appetite to invest in the crypto sector. The sector is valued currently at more than $3 trillion.
Media coverage and bitcoin awareness have made Singapore one of the world’s most crypto-friendly countries. This has attracted many foreign crypto investors while abandoning China where all crypto-related activities were banned.
However, plans to venture into the lucrative Singaporean crypto market are proving an uphill task. The Monetary Authority of Singapore (MAS) denied the two Korean companies approval to operate digital payment token services.
According to the Payment Services Act 2020, the regulator requires that only licensed digital payment token service providers may operate.
To discourage more applicants because of risks such as money laundering, MAS has only approved only 3 out of 170 companies.
Tech powerhouses
Established in 1999 as a web portal, Naver offers essential digital services such as search engines and is South Korea’s “Google” boasting over 54 million users.
Kakao was established in 2006 and runs KakaoTalk — Korea’s biggest mobile chat app. It boasts over 46 million active users on its platform. It also offers employment opportunities to over 10,000 people.
Being tech companies, Naver and Kakao have been rapidly exploring other digital markets as they seek to cement their presence and strengthen their control. However, their market dominance as platform providers is perceived by critics as grounds for unfair business practices.
As a result, they have called for regulations to prevent Naver and Kakao from capitalizing on their market share with abuse of power.
One expert said, “Online platform operators, which have trade information for both sellers and buyers, could use their exclusive monopoly of data to control consumers and small merchants in order to maximize their profits. To prevent abuse of power and unfair business acts by platform operators, it is necessary to pass an online platform law.”
