Hwaseong City's Local Currency Cumulative Issuance Surpasses 3 Trillion Won

Three Out of Four Citizens Have Subscribed; Usage Rate Reaches 96.7%
City: "10% Incentive Rate to Be Maintained and Operated This Year"

The cumulative issuance amount of the local currency in Hwaseong City, Gyeonggi Province, has surpassed 3 trillion won. This is the largest scale among all basic local governments nationwide.

The cumulative issuance amount of 'Hope Hwaseong Local Currency,' the local currency of Hwaseong City, has exceeded 3 trillion won. A Hwaseong citizen is making a payment with the local currency at a store. Photo by Hwaseong City

On January 13, Hwaseong City announced that the issuance amount of its local currency, "Hope Hwaseong Local Currency," totaled 757.5 billion won last year. As a result, the cumulative issuance amount since the introduction of Hope Hwaseong Local Currency in 2019 reached 3.0044 trillion won as of the end of December last year.

According to the city, the number of local currency subscribers stands at 784,520, which accounts for 74% of the city's total population of 1,050,888. This means that three out of every four citizens are using the local currency.

Notably, the cumulative usage rate since its introduction has reached 96.7%. This indicates that the vast majority of the issued local currency is being spent locally rather than remaining unused.

The city attributes this high usage rate to the 33,646 affiliated merchants that accept the local currency. The city’s analysis suggests that the local currency has expanded consumption in a sluggish market, boosting sales for small businesses and fostering a virtuous cycle in the local economy.

According to a policy impact analysis conducted by the Hwaseong City Research Institute, Hope Hwaseong Local Currency has achieved an average economic multiplier effect of 3.14 times the city's fiscal input. For last year, the institute analyzed that the production inducement effect was 4.5 times the budget input, while the value-added inducement effect was twice as high. The employment inducement effect was also estimated to reach 1,443 jobs.

The institute also noted that the local currency serves as a "defensive mechanism" by redirecting spending from large supermarkets and online shopping malls to local small businesses. Approximately 234.8 billion won (31.1% of the issuance amount) in spending that could have flowed out to other regions was redirected to local consumption, and 297.7 billion won (39.3% of the issuance amount) was channeled directly to local small business stores instead of large supermarkets or online shopping.

The city also explained that this has had a positive impact on small business sales. According to an analysis by Korea Credit Data (KCD), a data analytics firm, of sales at 10,004 local small business stores, the monthly average sales-which had shown negative growth in the first half of last year compared to the same period the previous year-rebounded in the second half of the year when the issuance of the local currency was expanded.

This trend became even more pronounced in September, when the Chuseok cashback event and an increase in the incentive cap were concentrated, with the year-on-year sales growth rate rising to 8.5% for that month.

The city plans to continue offering the nation's best local currency benefits this year, aiming to issue 1 trillion won over the year. To this end, a 10% regular incentive will be provided, and holiday cashback events will also be held. The city will strengthen its partnership with the public delivery app "Baedal Teukgeup" to reduce delivery fee burdens for small businesses and actively support their sales recovery.

Hwaseong City Mayor Jeong Myeonggeun said, "Hope Hwaseong Local Currency is a representative livelihood economic policy that directly connects citizens' daily spending with the local commercial district," adding, "We will work to vitalize the local economy by strengthening the structure in which funds stay and circulate within the region."