What is Local Currency? Economic Contribution of Gyeonggi Local Currency

Gyeonggi Local Currency would boost local economic growth across South Korea beyond the Gyeonggi province

Gyeonggi Local Currency

The flow and circulation of funds is important for the survival of local economies and businesses. There tends to be an unequal distribution of wealth between major corporations and small businesses, as well as between large urban and rural areas.

Without monetary resources, local businesses struggle to survive, yet funds typically drain from rural areas and small cities. To boost the development of the local economy, Gyeonggi-do has implemented a local currency policy administered by its cities and counties. The plan is to put money in the hands of local consumers and encourage consumption habits that are conscious of the regional economy.

What is the Gyeonggi Local Currency?

Local currency refers to a medium of exchange that can only be used in specific locations or regions; such a currency is complementary to the official central currency. Different regions around the world have adopted the use of local currencies to secure local capital circulation.
Gyeonggi Local Currency
Local currency acts as a complementary currency to a national currency

Similarly, Gyeonggi-do has adopted the use of local currencies that are administered by the provincial government in conjunction with cities and counties. These local currencies carry additional advantages for consumers including discounts and tax benefits. Local small businesses benefit from increased circulation thanks to special government programs.

Use of Gyeonggi local currencies is limited to small, locally owned businesses with annual sales of less than KRW 1 billion (with some slight variations among the cities and counties of the province). Depending on the locality, this currency is issued in different forms that include electronic cards, mobile apps, and paper vouchers.

To increase the efficiency of the local currency policy, regional welfare and social benefits, such as youth basic income, postnatal care support, disaster relief, and more are paid in local currency.

Why Is Gyeonggi Local Currency Essential?

Local currencies are widely used around the world to protect and improve local economies. A healthy local economy based on locally owned businesses is important for creating jobs and ensuring continued economic stability.

Gyeonggi-do Cash
Local currency as a stimulus to local circular economy
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For example, large corporations can change their plans in a given region after a couple of years and move their facilities to other regions or overseas, leading to widespread redundancies. A local currency helps avoid the drain of local wealth to big cities and central banks, assuring a healthy amount of capital remains in circulation in the region. The inadequate distribution of funds across a country can have stifling effects on regional development.

To improve quality of life for residents while also increasing local merchant revenue, Gyeonggi-do decided to implement a local currency policy that helps circulate funds while reviving traditional markets and backstreet business. The implementation of this policy is expected to encourage region-conscious consumption that helps residents and the economy, with regional control over associated resources and finances serving a key role in the realization of a strong and healthy economic plan.

Gyeonggi Local Currency & Disaster Basic Income

Amid the continuing economic fallout of COVID-19, Gyeonggi-do offered a disaster-related basic income payment of KRW 100,000 to each resident of the province who are eligible for(*Foreign residents : F-5 and F-6 visa holders).

The disaster-related basic income was paid in Gyeonggi’s local currency to help consumers and stimulate the flow of funds to traditional markets and small local businesses. With this program, the province seeks to reduce the burden on residents and small businesses suffering from the economic impact of COVID-19. Gyeonggi disaster basic income payments were made separately from other disaster relief provided by cities and counties.

Furthermore, to drive more business to alleyway shops, Gyeonggi-do will cover the processing fees for stores that have signed up with the local currency program and opted to offer a 5-10% discount to customers who use the local currency. Shop owners would normally bear a 0.7% processing fee when accepting local currency, but this will be waived through this new initiative. The province estimates that this can greatly contribute to easing the economic burden on small business owners.

Success of Gyeonggi Local Currency

The participating cities and counties in Gyeonggi-do offer their own versions of Gyeonggi local currency. As plans for local currencies take root, it is hoped that the cities and counties can have gain more control and autonomy regarding the wealth created in their region.

Gyeonggi Local Currency
Cities and counties in Gyeonggi Province issue local currency with different names and forms

Osan Local Currency (O-Saeg-Jeon)

The Most Loved Brand in Korea 2020’ awards ranked Osan City’s local currency first in the local currency category. The Osan local currency design incorporates the traditional Korean 5-color scheme to depict the 5 symbols of Osan (crows, ginkgo trees, plum blossoms, Osancheon, and Doksanseong fortress/Semadae site).
As of May 20, there were 121,623 O-Saeg-Jeon in circulation worth a total value of KRW 22.7 billion. Osan was the first city in Gyeonggi to pay 100% of disaster-related relief in their local currency.

Osan Local Currency

Osan City's Local Currency, "O-Saeg-Jeon"

Icheon Local Currency (Icheon Sarang)

Icheon City’s local currency (Icheon Sarang literally translates as “Love for Icheon”) is also receiving attention and praise from local residents. Icheon City issues the currency with the goal of guiding consumers to traditional and alleyway shops so as to help small business owners while preventing the drainage of wealth to other cities.

Icheon Local Currency

Icheon City's Local Currency, "Icheon Sarang"



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Gyeonggido-Korea (경기도): What is Local Currency? Economic Contribution of Gyeonggi Local Currency
What is Local Currency? Economic Contribution of Gyeonggi Local Currency
Gyeonggi Local Currency would boost local economic growth across South Korea beyond the Gyeonggi province
Gyeonggido-Korea (경기도)
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