North Korea - an economy with almost no financial sector and yet innovations in fintech can be observed in the informal sector. This is the headline of the new article by Dr Bernhard Seliger, published in the latest issue of KORUM Magazine. Observers were highly surprised when an international conference on blockchains and cryptocurrencies was announced in Pyongyang in April 2019. However, under the premise of international and especially American sanctions in the financial sphere, it is highly plausible that North Korea is looking for new ways to make its own financial flow more difficult to trace on the international stage. Nevertheless, according to Seliger, the financial sector within North Korea's borders remains underdeveloped. He also attributes this to the socialist structures implemented until the 1990s, which were responsible for the centralized banking and planning system. It was only when North Korea began to open up that foreign currencies began to flow into the country, which, in contrast to the national currency, had real market value. One consequence was a growing informal sector in which the discrepancy between official prices and market prices grew. In his article, Seliger goes on to explain how this was countered at the political level and how North Korea's financial sector is still developing today under the factors of the nuclear programs, international sanctions and the COVID-19 pandemic.
KORUM Magazine is a quarterly publication of the KGCCI that provides
information on Korea's economy, markets, businesses, technologies, as well
as tax, legal or intercultural issues. You can visit the KGCCI website here and access the full article here.