Two South Korean ministries have announced their support for the blockchain industry in the country with plans to allocate up to $3.2 million in funding to local startups to encourage the use of such technology.

The Ministry of Science and ICT (Information and Communications Technology) and the Ministry of Information and Communication Industry Promotion will launch a pilot program called "Blockchain Technology Validation Support in 2020" to carry out the project, according to a March 16 report.

The plan is to select nine projects through free public offerings and grant each one up to 450 million won ($360,000) in funding.

Among the program's selected criteria is the excellence of current performance, the feasibility of future performance, the feasibility of technology verification, solid business goals and savvy, expected results, and level of jobs expected to be created.

Project's key targets

The companies selected, according to the project, must offer services that can create economic and social value through blockchain technology.

About the program, Park Yoon-kyu, Minister of ICT, said the following:

"We plan to support domestic specialized companies to rapidly grow and activate the ecosystem in the early stage of the blockchain market."

Beyond blockchain, the project encourages participating startups to create business models based on the Internet of Things (IoT), artificial intelligence and big data.

According to the announcement, the companies selected last year applied to five patents, nine copyrights registrations and two investment rounds.

Pivotal moment for blockchain development across South Korea

The news comes at a critical moment for the development of the blockchain ecosystem in South Korea. Cointelegraph reported on March 5 that the country passed a law to introduce a permit system for cryptocurrency exchanges.

On February 18, CT also reported that the Bank of Korea was looking to deploy blockchain in bond market technology, which would allow the distribution of bond records among all participants.