South Korea's N-Po Generation Turns to Digital Currencies Amid Economic Challenges
Summary:
Amidst economic struggles, South Korea's younger generation, known as the "N-Po generation", is turning to digital currencies and the potential of Web3 tech, despite the hardships born from foreign domination of vital infrastructure and inflationary pressures. This shift to digital investment is propelled by a lack of societal opportunities and the influence of online opinion leaders. The South Korean government is responding to this trend by embracing the potential of the digital currency market and initiating forward-looking projects like a central bank digital currency (CBDC). These societal and economic changes have led to the growth of South Korea's thriving Web3 market.
Facing economic difficulties, South Korea has seen a rising interest in digital currencies, specifically among the "N-Po generation" comprised of those aged 20-39. This group is dealing with economic hardships and societal pressure, but sees potential and refuge in the flourishing digital market and the potential of Web3 technology. Their struggle started in 1997 when the Korean won devalued significantly following a currency crisis, and as a result, South Korea had to seek a bailout from the International Monetary Fund (IMF).
Many foreign investors got attracted due to the restructuring that followed, leading to foreign entities acquiring vital infrastructure companies, including the First Bank of Korea and Kumho Industrial. This dependency on foreign capital made the economy vulnerable as corporate gains took precedence over national interests, exacerbating inflation. Surging housing prices, driven by Chinese investment, aggravated the housing shortage, particularly in cities like Seoul, where a flat of 60-square-meters can cost more than 100 million yen.
The term "N-Po generation" is derived from the idea of "pogi" or abandonment, signifying the economic adversity young Koreans are facing. Many under 25 abandon milestones such as love, marriage, childbirth, homeownership, and socializing. They were originally referred to as the "three-employed generation" in 2011, due to the multiple jobs members had, even before seeing a rise in youth unemployment figures in the years that followed.
The label has since evolved to include the "Five-Po generation" that has forfeit job prospects and homeownership, and the "Seven-Po generation," those who have given up on relationships and dreams. This grim reality is made worse by the country's fertility rate which now stand at 0.78, well below the replacement rate.
The social discrepancies are obvious, with the top 3% being considered “elite”, leaving the rest to grapple with limited opportunities enforced by an ingrained hierarchy.
Now, South Korea's Web3 marketplace is flourishing, despite these societal and economic challenges. The market is bustling with activity, boasting more than 200,000 active users, about 15% of whom indulge in trading on centralized exchanges (CEX). This robust buying capacity has even led to a "Kimchi premium" for shares listed on Korean digital currency exchanges, making them more costly by 5-10% compared to exchanges elsewhere.
N-Po generation, representing 97% of the population, face few alternatives in a society besieged by inflation and spiraling housing costs, making the fulfillment of basic necessities challenging. Believing in their capability to overcome challenges, they are turning to high-risk assets, hoping for a big payoff.
As opposed to its ever-vigilant approach during the ICO boom, the South Korean government is now recognizing and welcoming the prospective economic advantages of the digital currency market. Evidence of this shift can be seen in several initiatives, such as the planned launch of a central bank digital currency (CBDC) in the last quarter of 2024.
South Korea, often referred to as the "netizen" kingdom due to its expansive internet culture, sees its young population spending more time in the digital world than in the real one. As societal constraints and the internet's overwhelming influence make earning via conventional methods difficult, people are increasingly turning to online platforms. This has led to a rise in cryptocurrency gambling, especially in altcoins and meme coins.
Amid all this, opinion leaders are proving to be significantly influential, notwithstanding skepticism towards mainstream media among the youth. These influencers have led to the creation of KOL Telegram communities with member counts ranging from 2,000 to 200,000, playing a crucial role in shaping consumer behavior.
Despite the prevailing pessimism, crypto enthusiasts in South Korea are still hopeful and passionately in search of their own success in the midst of societal challenges.
Shinnosuke “Shin” Murata, founder of blockchain game developer Murasaki, began his journey with Japanese conglomerate Mitsui & Co. in automotive finance and trading. He later joined a startup called Jiraffe as the first sales representative and assisted Belgian football club STVV with creating a community token. Established in 2019 in the Netherlands, Murasaki is his current initiative. The opinions expressed solely belong to the author and do not represent the views and opinions of Cointelegraph. This article is for informational purposes only and is not intended to serve as legal or investment advice.
Published At
2/15/2024 2:15:01 AM
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