The company behind OK Cashbag, the oldest and most popular mileage point program in South Korea, is mulling a plan to convert cash points accumulated by its users into cryptocurrency.
Operated by SK Planet, the e-commerce arm of communication giant SK Telecom, OK Cashbag point was launched in 1999 to reward users who purchased goods and services from SK affiliated merchants. In an interview with CoinDesk Korea, SK Planet said a plan to introduce a blockchain system to tokenize cash points has been shared with the company’s top-level management in an effort to operate the service more securely.
Since one point equals to one Korean won at the moment, the company said the plan, if it comes through, will also convert points into a stable coin, such as the U.S. dollar-pegged tether cryptocurrency.
While the plan – temporarily called OKX – is subject to the firm’s further examination before its debut, it’s notable given the existing user base of OK Cashbag and the number of merchants that accept the usage of OK Cashbag points.
According to the report, the program now has over 35 million users with more than 50,000 affiliated merchant stores where consumers can spend their rewards. They can also exchange points for cash if they earn more than 50,000 points.
And, while SK Planet could not calculate the exact amount of its reserve, the company told CoinDesk Korea the total points on its balance could be worth over $100 million.
Stepping back, the report also indicated that SK Planet’s move may still encounter potential regulatory hurdles even if the company decides to roll out the initiative.
According to the report, OK Cashback’s cash point system is currently categorized as “prepaid electronic payment means.” Firms offering this type of service must obtain an approval from South Korea’s Financial Services Commission.
Since the South Korea government has yet to pass a legal framework on cryptocurrency, it remains to be seen whether SK Planet’s plan could receive regulator’s approval under the Electronic Financial Transactions Act mandate, the report said.
Korean won image via Shutterstock
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