Gyeonggi-do Sees 227% Surge in 'Usage and Registration' with 25% Incentive on Local Currency

[Asia Economy (Suwon) = Reporter Lee Young-gyu] Gyeonggi Province is seeing a surge of residents purchasing limited-edition Gyeonggi local currency that offers a temporary 25% incentive to revive consumption and the Chuseok holiday economy, which have been depressed due to COVID-19.

According to Gyeonggi Province and the Gyeonggi Market and Commercial District Promotion Agency on the 21st, from the 18th to the 20th, when the issuance period for the limited-edition local currency began, the average daily usage amount of the Gyeonggi local currency was 14.3 billion KRW. This represents a 227% increase compared to the average daily usage amount of 6.3 billion KRW for general issuance excluding policy issuance over the three months from June to August.

Policy issuance refers to providing support to policy beneficiaries such as child allowances, childbirth subsidies, and youth basic income in the form of local currency. In contrast, general issuance means users charging and using local currency with their own money.

New registrations for the Gyeonggi local currency have also surged since Gyeonggi Governor Lee Jae-myung announced the plan to provide consumption support funds (limited-edition local currency) on the 9th. From that day to the 20th, the average daily number of applications was 11,741. This is a 197% increase compared to the average daily applications of 5,949 from June to August.

Looking at the registration and usage trends of the Gyeonggi local currency, new registrations reached 14,526 on the 9th, the day the consumption support fund was announced. On the 18th, the first day of the consumption support fund issuance period, registrations hit a record high of 19,337. Usage amounts were recorded as 19.3 billion KRW on the 18th, 14.8 billion KRW on the 19th, and 8.8 billion KRW on the 20th.

Gyeonggi Province expects that this increasing trend will revitalize small business owners and neighborhood markets struggling due to COVID-19 through the consumption support funds.

In fact, among the 503,980 card-type Gyeonggi local currency affiliated stores in the province, small business stores with annual sales under 300 million KRW (370,245 stores) accounted for 478.1 billion KRW in payments during the first half of this year, representing 36.7% of the total payment amount of 1.3107 trillion KRW.

On the other hand, BC Card, a commercial card, recorded a total payment amount of 19.1242 trillion KRW during the same period, with large stores having sales exceeding 1 billion KRW accounting for 12.2361 trillion KRW, or 64% of the total.

Jo Jang-seok, head of the Small Business Division of the province, explained, "This data shows that local currency shifts consumption patterns from large-scale stores such as large marts to neighborhood commercial districts, the capillaries of the local economy, thereby inducing a virtuous cycle centered on small business owners in the local economy."

Meanwhile, Governor Lee Jae-myung announced earlier this month a support plan that adds an additional 15% consumption support fund on top of the existing 10% incentive when charging 200,000 KRW. To receive the consumption support benefits, users must spend at least 200,000 KRW by November 17 at the latest, based on usage starting from the 18th of this month.

The province has secured a budget of 100 billion KRW. The province will provide consumption support funds on a first-come, first-served basis to all users holding Gyeonggi local currency cards or mobile local currency until the budget is exhausted.