Korea Customs Service to use ICON’s loopchain system
The system solves a very real and fast growing problem.
Online shopping has really taken off, with companies like Amazon scaling hard in search of more ways to make it cheaper, easier and all around better than dragging oneself to a physical store. But along the way, a lot of countries started noticing an unfortunate side-effect.
As more shopping moves online and towards deliveries from overseas, in-store sales start dwindling. And as that happens, so does the tax revenue gathered from the retail sector.
The obvious/only answer is to find a way of taxing all those online sales equivalently to in-store sales. The downside is that this is much, much more difficult. In Australia, there's no viable way of taxing these items that wouldn't cost more than it earns. This is putting a significant and growing dent in the tax revenues of countries around the world, and solutions have so far been hard to find.
South Korea is noticing similar problems, with low volume e-commerce sales presenting an inordinately expensive tax nightmare. But quite unlike Australia, it recognises the potential of distributed ledger technologies (DLTs) such as blockchain to solve these problems.
That's what's happening now, with the Korean Customs Service (KCS) announcing the "Blockchain based Customers Clearance Platform." It's intended to streamline the customs clearance process and remove the bottlenecks that come with trying to apply appropriate customs duties and do the right paperwork and other due diligence on everything coming into the country. It can also be integrated with similar blockchain-based systems that are currently reshaping the shipping sector, for a wider degree of automation in the future.
"Through this pilot project, we will carry out technical verification for practical and effective application of block-chain new technology in the field of e-commerce customs clearance and plan to improve related laws and systems," KCS said.
The system will be run on the loopchain system developed with ICON (ICX) for these kinds of purposes.
"Korea Customs Service (KCS) has applied blockchain technology in hopes to grow the direct purchasing of foreign goods," says the ICON statement. "It takes too much time and money to report a small volume of e-commerce sales. As a result, KCS has taken the first step in establishing blockchain based e-commerce clearing services with the goal of providing prompt and accurate data validation. When the blockchain based e-commerce platform is established, it will not only lower logistics costs, but also mitigate the threat of illegal activities such as smuggling and false reporting."
The plan is to launch a pilot of this system by the end of the year, and if all goes to plan, start applying blockchain technology to all Korean e-commerce import and export services shortly afterwards.
After working on the technological underpinnings of the platform throughout 2017, ICON has dedicated 2018 mostly to real-world testing and wider adoption. The plan seems to be well underway.
Disclosure: At the time of writing, the author holds ETH, IOTA, ICX, VET, XLM, BTC and NANO.
- How $1.9 trillion of stimulus could push Bitcoin’s price to a new all time high
- Ethereum price dips below $1,500 in midst of marketwide correction
- Bitcoin price drops as Fed Chair attempts to squash inflation concerns
- Ethereum price dips by 25% over the past week. What happens next?
- Ethereum price crumbles as dApps flee for cheaper platforms