Daejeon City "Reduction of Ontong Daejeon Limit and Cashback... Reviewing Continuation of Operation from the Beginning"

[Asia Economy (Daejeon) Reporter Jeong Il-woong] The recharge limit and cashback amount for the Daejeon local currency Ontong Daejeon will be reduced. The operation of Ontong Daejeon will continue until this year, but whether it will continue next year will be decided later.

On the 7th, Daejeon City announced that due to the recent surge in consumption using Ontong Daejeon following the easing of COVID-19 quarantine measures, the cashback budget secured for this year was depleted early, leading to this decision.

First, Ontong Daejeon will maintain the existing monthly recharge limit of 500,000 KRW with a 10% cashback this month. However, cashback will only be paid until the remaining budget (16.4 billion KRW) is exhausted.

From next month, a monthly recharge limit of 300,000 KRW with a 5% cashback will be applied, and cashback will be paid only until the monthly cashback budget of 7 billion KRW is exhausted; payments will stop once the allocated budget is depleted.

In particular, the city stated that it will analyze the effectiveness of this year's Ontong Daejeon project budget input and consumption patterns by income level to reconsider the continuation of the project next year from scratch.

A city official explained, "It is true that Ontong Daejeon started operating in May 2020 at the onset of the COVID-19 outbreak and played a role as a policy tool to overcome COVID-19. However, considering the enormous annual budget input of 250 billion KRW, consumption concentration by region and industry, and consumption imbalance by income level, we could not help but review the continuation of the project from the beginning."

Especially, the official said, "While consumption through Ontong Daejeon has surged and the required cashback budget has sharply increased, the government has declared that it will stop related support from the second half of the year. Therefore, it is financially impossible to cover the entire project cost with city funds. The city will take time to minimize dependence on Ontong Daejeon cashback and seek operational improvement plans focusing on small business owners and socially vulnerable groups."

Meanwhile, as of the end of last month, Ontong Daejeon has about 630,000 active users who spend an average of 340,000 KRW per person per month. Considering this, the city estimates that the cashback payment budget to be投入 by the end of the year is roughly 175 billion KRW.