With the enforcement of the ‘Act on the Reporting and Use of the Specific Financial Transaction Information’, the fate of virtual assets service providers will be determined. These providers should finish reporting until Sep 24th to continue their business such as the acquisition of real-name bank accounts and construction of an anti-money laundering system. As requirements for reporting being complicated, the analysis that says so-called ‘Kimchi Coin’ making domestic customers suffering will take steps to exit is gaining strength.
There is one who feels most sorry that Korea’s excellent blockchain technology might shrink or disappear due to these financial regulations. Bruce Jeong, a deputy chief executive officer of the Israel Eulogian Foundation, is him. Our chief editor Yeong-Sil Kim met Bruce Jeong, known to be a Korean financial investment expert in the Middle East, at the Courtyard Hotel for a cup of tea.
He headed to Australia when he was a high school student and majored in law and accounting, then after graduation, he have learned the investment flow of companies around the world, starting with M&A work at a consulting company in New York, U.S. Based on this experience, he have become a big hand in attracting foreign capital such as from the Middle East to Korea and serving as a bridgehead for Korean companies to enter the global market. *For the convenience of the readers, we have arranged the conversations in the form of an interviews.
Yeong-Sil Kim: What was your opportunity to decide to directly arrange investment in Korea?
Bruce Jeong: The starting point was in last year, the consideration of a new airport in Gadeokdo, Busan. The project with the investment about approximately 7 trillion won was making progress, but failed as the act has taken effect. After that, the SOCSocial Overhead Capital project guaranteed by the government have also failed. So now I assume that finding out the new technologies favored by the Middle-Eastern market and arranging investments also might be an extension of investment. As one of them, the presentation of a financial platform utilizing domestic blockchain technology is being considered.
Kim: Could you mention some projects on progress by arranging domestic and foreign investments?
Jeong: About 800 billion won of construction fee is being invested to build Cryto IDC Center based on domestic AI. The IDC Center will help further enhance blockchain technologies of the Middle-Eastern, Chinese, and Korean markets. Overseas financial markets are going through changes day by day with FinTech technology. This is why some predict that ‘banks will significantly lose their functions or disappear,’. Korea is slow in the innovation of financial platform enough to be called as bureaucratic finance. Therefore, it is hoped that Crypto Bank, which enables payments between countries only with coins, will be made in the financial market with excellent Korean technologies. Financial platforms such as JPM Coin Project by JP Morgan, a major U.S. global investment bank, and Facebook’s Calibra→Novi Project are the precedents. This can be considered as an alternative to overcome the limitations of the domestic financial market with so many regulations.
Overseas, I have arranged some of the investments of SoftBank Vision Fund and now the Smart Medical City Project is on its progress in Neom, Saudi Arabia. Saudi Arabia is increasing its investment in the solar industry rather than relying on the oil industry anymore. Rather than only using its original oil resources, the focus is now on discovering complex industrial items based on new technologies.
Kim: Where do you usually arrange attraction of funds for investing?
Jeong: Usually find the investment destinations with the Chinese funds in rich countries. I’m working on the promotion of investment exchanges among South Korea, China, and Middle-Eastern countries while cooperating with Silk Road Fund and Chinese investment groups. As I’ve recently occupied a vice-chairman of KDG, I’m planning to actively find opportunities for Korean companies to enter the Chinese market. As I’m in charge of the upcoming project in October to promote the exchange of duty-free goods between Korea and China, I will do various activities to secure a continuous investment destination between Korea and China. With increasing investment exchanges, there will be more opportunities to attract overseas fund to Korea.
Kim: Which markets are being most interested among Middle-Eastern countries?
Jeong: Battery industry has the highest demand. As the electric vehicle industry has dominated the market with the global trend, eco-friendly policy direction, the battery market has become the core. Customized technologies are important for targeting the Middle-Eastern markets. Markets with both high future industrial values and eco friendly elements have high investment value.
When it comes to renewable energy, there is also a high interest in the solar energy industry. In about 10 years, more than 80% of all industries are expected to invest in renewable energy sectors. Last year, the amount of money invested in the solar energy industry has already exceeded the investment in existing resources such as coal. As it is showing rapid growth, industries related to the solar energy are also in positive territory.
CryptoBank sector based on blockchain also has active investments. Investment in blockchain financial platforms will serve as an opportunity for change from the perspective of domestic financial markets which are relatively more regulated
Kim: Is there a key element of corporate assessment in the investment process?
Jeong: The ESGEnvironmental, Social, and Governance management. As eco-friendly elements are considered important in investments of technical resources, the corporate’s sustainability is determined with ethical elements even when it comes to the company management. If it does not reflect the elements of ESG management, it would be excluded from the process of determining company investment. In Middle-Eastern countries, where women’s activities are restricted, the social governance structure of women is also being expanded with ESG management elements. Eco friendly regenerated cities that are recently being introduced in Europe are also part of the realization of ESG values.
Kim: Please leave a message for domestic companies wanting to attract investment.
Jeong: It is planned to secure investment funds for new technologies, focusing on market targeting six GCCGulf Cooperation Council countries aimed at international economic cooperation among Arab nations. With the launch of the AI Crypto IDC Center in Korea, investment offers in domestic technologies from Middle-Eastern companies are also significantly increasing. I’m expecting the growth by creating a structured investment platform with Korean engineers. As the GCC market is emerging as a blue ocean for investment funds or the introduction of new technologies, the AI Crypto Center with high technical skills is expected to be a milestone for Korean SMEs to enter the Middle-Eastern market.
I’m also planning to invest in countries focusing on small blockchain finance, such as Tahiti, in the long term. Futuristic industries are fully actualizing our imagination.Therefore, I hope that domestic companies will be able to challenge the Midddle-Eastern market with excellent technical professionals. Just as artificial intelligence is in our everyday lives, I also hope that CryptoBank with blockchain technology will emerge as a new financial platform.
Conversation Arrangement by Reporter Kyeong-Ah Moon kamoon@hitech.co.kr
