30s Summary

Fireblocks and South Korean bank NongHyup Bank are collaborating on a prototype for tax refunds using tokenization technology. The project aims to refund VAT and GST paid at shops, enhancing transparency, security and trust. Tokenization assigns digital identifiers to assets, allowing real-time tracking from issue to settlement. Fireblocks is also expanding its offering to include derivatives trading in partnership with Coinbase International and a Web3 kit for startups.

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Fireblocks, a platform for digital assets, is teaming up with a major South Korean bank, NongHyup Bank, which mainly serves the agricultural sector. Together, they’re planning to design a prototype for tax refunds.

The cool part? They’re using a new approach known as ‘tokenization’ for taxes. Essentially, Fireblocks and NongHyup Bank will run a test project using Fireblocks’ token technology to refund VAT (value-added tax) and GST (goods and services tax) paid at shops. The goal, as stated by Fireblocks’ CEO, Michael Shaulov, is to enhance transparency and security.

What is tokenization, you ask? Well, with tokenization, digital identifiers can be assigned to assets. This allows us to track them in real-time, right from when they’re issued to when they’re settled, avoiding errors or fraud.

This method cuts down operational costs, while also securing an unchangeable record that strengthens the trust between banks and their customers.

In South Korea, VAT is a fixed 10%. Some items, like medical supplies and unprocessed food, don’t have VAT. Tourists can also skip VAT for most purchases except very small ones. To get a VAT return, charges range between 3% to 6% of the cost of the item.

Fireblocks and NongHyup Bank are also on the lookout for more opportunities to work together. As quoted by the bank’s president, Lee Seok-yong, this partnership is a significant step for their bank as they aim to provide their customers with blockchain-based services. NongHyup Bank has a customer base of over 10 million. For a while now, major banks in South Korea have shown a keen interest in blockchain and digital assets.

Fireblocks, which started by offering custody solutions and helping blockchain projects securely deal with digital assets, is now expanding its scope. This includes offering products like derivatives and trading to retail and institutional investors in partnership with Coinbase International. It’s also offering a Web3 kit for startups.