South Korea plans to provide digital identities encrypted by blockchain with smartphones to citizens in 2024 to facilitate their economic development, reported Monday Bloomberg.

The South Korean government stated that with the expansion of the digital economy, smartphone-embedded identification is an indispensable emerging technology to support data development.

Through digital identities on the blockchain, the network verification process will be simplified and users will be able to log in without having a certificate or verification code sent via text message.

Widespread use based on digital IDs is expected to increase government efficiency by saving more administrative time and labor, reducing wage fraud, expanding consumer credit, facilitating trade, and generating new markets.

Alternatively, other applications of digital IDs include: facilitating medical services online; check-in at the hotel using a smartphone; prevention of counterfeiting and identity theft; remote approval of contracts; fast boarding etc.

McKinsey & Company believes that the introduction of digital IDs could increase a country’s gross domestic product (GDP) by up to 13% and reduce business costs by trillions of dollars.

Quoting Hwang Seogwon, an economist at the Korea Institute for Science and Technology Policy, highlighted the importance of risk assessment:

“Digital IDs can bring huge economic benefits in finance, health care, tax, transportation and other areas, and can quickly gain popularity among the Korean population.”

Meanwhile, Suh Bo Ram, head of the Korea Digital Government Office, said South Korea could gain at least 60 trillion won ($42 billion) in economic value over a decade from the plan, which is close to 3% of the national GDP of South Korea.

In addition, South Korea seeks to adopt the digital identity system for 45 million people within two years. Under the plan, the government will not be able to access information stored on people’s mobile phones, including details about who’s digital IDs are used and how and where they are used, as the system will be entirely based on the identity of decentralization based on blockchain technology.

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