LG Electronics To Venture in the Blockchain and Crypto Business

Key Insights:

  • LG Electronics is set to enter the blockchain and crypto business.
  • Other South Korean tech giants like Samsung have already taken their first step towards crypto adoption.
  • South Korean markets have witnessed increasing activity over the last year. 

Crypto adoption is in full swing across the globe, while institutions and corporations aim to capitalize on the growing sector. Of late, more and more top-tier firms from various sectors are jumping on the blockchain train to appease their customers and lure newer participants. 

Another tech giant recently decided to jump on the bandwagon. LG Electronics has added cryptocurrency and blockchain devices as new business areas in its corporate charter. 

Expanding Through Crypto and Blockchain

Heralding an expansion into new fields beyond home appliances, the South Korean tech giant LG Electronics has updated its business development goals to include cryptocurrency and blockchain-based software.

Local South Korean news media organization reported that LG had added two distinct crypto-related objectives during its annual general meeting on March 24. The new objectives include ‘the development and selling of blockchain-based software’ and ‘the sale and brokerage of cryptocurrency.’   

LG’s recent announcement has led people to wonder whether the firm would establish some form of crypto exchange or marketplace. 

A spokesperson from the firm told local news organizations that ‘nothing has been decided yet,’ regarding building a crypto marketplace. According to reports, the company has merely mentioned business areas to expand broadly. 

Notably, the tech manufacturer introduced smart television models with the NFT option last month with a blockchain company called Kakao’s Ground X. LG had also announced a partnership with Seoul Auction Blue, an NFT-focused company, to carry out projects related to NFT-based artworks.  

South Korean Market Looking Ripe

South Korea is a well-known hub for crypto trading activity. A recent survey highlighted that around 3.8% of the population owned some form of crypto assets. Furthermore, South Korean crypto providers booked a $2.7 billion net profit last year.  

Seemingly the market offers good scope for growth for firms as demand for digital assets in the nation is on the rise. Earlier this year, LG’s competitor Samsung announced that it would be launching an NFT platform for its smart TVs and its store in the Decentraland metaverse.

In South Korea, native blockchain platforms like Klaytn are seeing their domestic dominance dwindle, with competitors such as Polygon taking over the NFT marketplace. 

Earlier this year there were rumors about LG creating a crypto-related marketplace emerged when Bithumb CEO Heo Baek-young confirmed that the exchange was working with ‘a large company’ to develop an NFT marketplace.

Who Will Be the Winners – and Losers – of a Digital Currency Revolution?

Key Insights

  • Some private-sector firms like Visa and Mastercard think they’ve prepared for CBDCs
  • Several Asia-based firms are already working on CBDC solutions with central banks
  • Commercial banks and crypto operators could feel the brunt of CBDC rollouts

Crypto and fintech are playing an increasingly large role in the lives of millions of people the world over – and central banks don’t like it one bit.

Their response to the fact that cryptocurrencies and digital payment solutions have exposed conventional remittance and cross-border transaction systems as slow, sluggish, expensive, and antiquated has been almost universal. It’s time, they have realized, to go digital.

The central bank digital currency (CBDC) paradigm is still something of a theoretical notion rather than a concrete reality in most parts of the world. But that picture is likely to change in the next few years, with central banks now looking to launch their own digital coins and bodies like the IMF championing their cause.

If China’s digital yuan rolls out – as expected – this year, the race could well be on to see which country is the first to follow Beijing’s lead.

Who would stand to benefit the most if CBDCs become commonplace in the future? And who would be in line to suffer the most from digital fiat issuance? It’s time to find out.

Potential Victors

Many companies have pinned their hopes on becoming early adopters in the new digital currency paradigm.

Some have invested small fortunes on CBDC technology – quite a leap of faith, considering nobody really knows quite what a CBDC would actually look like, what IT solutions it would make use of, and if it would really take off.

Few central banks in the world have fully committed to issuance, too – although the somewhat panicky speed of their pilot projects indicates that they have accepted that CBDC rollouts will one day become an inevitability.

Rather than lose more ground to crypto innovators, most are now either testing coins or exploring means of creating digital fiats with expert advisors.

In the private sector, this has been duly noted by the likes of Visa and Mastercard, who have already created CBDC platforms – and clearly have no intention of being bit-part players in the CBDC revolution.

Last month, Visa announced a partnership deal with Consensys that will allow Visa users to link their cards or digital wallets to CBDC networks and pay with a digital token anywhere Visa is accepted as a form of payment.

Visa’s biggest rival Mastercard has also been working on its own solutions, including a proprietary virtual testing platform for central banks to evaluate CBDC use cases and explore designs, as well as a card linked with one of the world’s only fully rolled out CBDC, the Bahamian sand dollar.

Both firms are continuing to invest and explore CBDC solutions, but they are not alone. Some private-sector firms are working directly with central banks on their pilots – and even issuances.

These include Japan’s Soramitsu, which worked directly with the Cambodian central bank on its own CBDC – and has since said it is “speaking with other” central banks elsewhere in the world about similar projects.

In South Korea, a consortium headed by the tech giant Kakao and comprising arms of the electronics behemoth Samsung is currently piloting the Bank of Korea (BOK)’s CBDC in tests that should be complete by the end of the first half of this year.

This should give them a huge head start in the CBDC game – although Kakao subsidiaries have been working on CBDC-related projects for many months in preparation.

Crucially, the BOK’s pilot CBDC runs on the Klaytn blockchain protocol, developed by the Kakao subsidiary GroundX. So if the BOK decides to use Klaytn, its CBDC’s destiny will be tied to that of the network.

Other South Korean tech titans are also closely linked. For instance, the Klaytn Governance Council comprises LG Electronics and another LG Group subsidiary. In addition, LG’s tech services arm LG CNS is also working on CBDC solutions – and last year launched a CBDC platform in conjunction with Shinhan, one of South Korea’s biggest commercial banks.

The BOK pilot is also significant in that it has seen the coin tested on Samsung mobile devices – with Apple edged out of the picture. This could give Samsung another edge, which is already trying to beef up its smartphone-based digital wallet solutions.

Some central banks, including the Bank of Israel, are looking to the Ethereum blockchain network for answers – which could mean that companies that work closely with Ethereum (such as the aforementioned Consensys) will likely play a key role in adoption drives.

As many crypto developers (think NFTs and many coin issuances, for example) seem to gravitate toward Ethereum naturally, there is cause to suspect that companies that manage to create a bridge between this protocol and CBDCs could well be on to a winner.

Ethereum developers, as well as the developers of rival protocols like Solana and Cardano, could be another group that ends up on the “winning side” of a fast-paced CBDC adoption revolution.

And Who Might Lose Out?

Who would stand to suffer the most in the event of an adoption drive? The obvious target is crypto and crypto firms. A quick look at China proves that central banks clearly do not like the idea of having to compete with decentralized competitors that they cannot bring to heel quickly. Outlawing crypto, mining, and exchanges would quickly ensure that the only horse in the race belongs to the central bank.

But some nations may not choose to take such a draconian course of action. And it could be the case that crypto and CBDCs find a way to co-exist.

Far more perilous, some might suggest, would be the situation for commercial banks, which could be cut out of the picture altogether by a CBDC or used as mere intermediaries for issuance.

In China, a central bank-run CBDC app is already in use, leaving commercial banks looking somewhat out of place in some cases.

Sure, many banks may suggest that lending and mortgages make up the core of their business anyway, but they will find it worrying if they don’t seem to have a clear role to play in the emerging CBDC picture.

Also potentially in the firing line are e-pay platforms, such as Apple Pay, Alipay, WeChat Pay, which are already being frozen out of the picture in Chinese pilots.

At the recent Winter Olympics, many athletes and journalists were stunned to discover that official Olympic venues did not accept any form of payment except Visa (the games’ official sponsor), the digital RMB, or (yuan) cash.

Alipay and WeChat Pay – which represent 15% of the entire Chinese payments market – have already had their wings clipped by Beijing in a number of other moves.

Again, this could be seen as a draconian measure by free market-loving democracies. But if the chips are really down for central banks and their CBDC projects, it’s worth ruling nothing out.

Despite Bearish Crypto Market, OpenSea Trading Volume Continues to Gallop

The crypto market might be down, but the non-fungible tokens space remains a hot cake. That’s what the transaction volume of OpenSea reveals. 

The NFT marketplace has seen $2.1 billion in NFT sales within the first ten days of the year, more than half of its record trading volume of $3.5 billion in August 2021.

OpenSea Transaction Volume Could Reach $6 Billion This January

While several major cryptocurrencies have been losing a substantial part of their value in the last 30 days, NFT sales appear to be going higher. On January 2, 2022, OpenSea had sales worth $243 million. That was more than the $124 million it made on the first day of the year and $170 million in sales on December 31.

At this pace, analysts have projected that the NFT marketplace could record over $6 billion in trading volume for this month.

In 2021, OpenSea had a trading volume of almost $14 billion. This is far ahead of the previous year when it traded only $21.7 million worth of assets. The 646% surge in trading volume shows how much the NFT sector has matured within a year.

OpenSea has established itself as the prime place to buy NFTs. It accounts for close to 60% of the market sales, leaving its competitors far behind. The nearest platform, Rarible, recorded $260 million in its transaction volume for 2021.

PhantaBear, Bored Apes Record Huge Sales in Last Seven Days

The dominance of OpenSea isn’t surprising given the collection of NFTs on it. The marketplace features the biggest NFT collections such as Bored Ape Yacht Club, CryptoPunks, etc. However, the current trading streak is driven by the rising interest in the PhantaBear collection, Bored Apes, and Doodles collections.

Per data from the platform, Jay Chou’s PhantaBear collection leads the sales volume with over $53 million, while Bored Apes has recorded around $51.5 million within the last seven days.

What makes this trading streak even more interesting is how it negates the overall situation of the crypto market. As the crypto market pullback continues, several tokens have dropped substantially in value. Even NFT tokens such as MANA, ENJ, SAND, and AXS have lost at least 10% of their value in the last seven days.

However, the trading volume isn’t that surprising. Interest in NFTs continues to grow as more people see value in the space. Recently, legendary rapper Eminem bought a Bored Ape NFT. Just as celebrities buy NFTs, tech companies like Samsung and LG have revealed plans to integrate them into their latest products.

Crypto Inspiration Boosts GameStop Stock by Over 20%

The shares of video game retailer GameStop saw a 27% rise on extended trading yesterday. This came after news that the company is launching a division to develop a Non-fungible token (NFT) Marketplace and establish cryptocurrency partnerships.

GameStop to Launch an NFT Marketplace 

Although the company refused to comment, a source close to the matter confirms this saying it is part of the massive restructuring currently ongoing at the company. This is in a bid to turn GameStop to eCommerce after years as a brick-and-mortar business.

Apparently, an NFT marketplace is an important part of this plan. According to Wall Street Journal, which first reported the news, the company is already working with some game developers and publishers who’ll list their NFTs on the marketplace.

The company got a lot of attention during the meme stock rally as the price of GME went through the roof last year. But it has since dropped to more conservative levels. 

Now, an NFT marketplace appears to be the perfect catalyst the company needs for its shares to rebound. GameStop launched an NFT website last year for creators to join the platform and also announced that it would be accepting popular meme coins, Dogecoin and Shiba Inu.

With the company already hiring over 20 people to work on the project, the marketplace might be a reality soon. Per WSJ, the marketplace will be a virtual space for people to trade NFTs of virtual video games collectibles.

GameStop’s interest in NFT isn’t surprising, especially with the digital asset’s mainstream attention in recent months. You’ll recall that we reported the acquisition of an NFT by popular football star Mario Gotze. We also reported that a leading sporting event, Australian Open, is also incorporating NFTs into its tournament.

Also, two of the leading electronics makers in the world, Samsung and LG electronics have announced that they would be adding NFT features to their new smart TVs.

NFT-related Tokens are in red Despite Public Interest

According to data from Coingecko, the top 5 NFT tokens by market cap have lost between 2% to 25% of their values in the last seven days.

In fact, Axie Infinity’s AXS token, for example, is one of the biggest losers as it lost over 20% of its value within the last 7 days despite the growing interest by top companies like Adidas and others. Other top losers include GALA and SAND with losses in double digits too.

However, it should be noted that the entire crypto market is currently bearish.

Projects like Decentraland, Enjin Coin, and others went on a bull run that culminated in their native tokens rising to new heights last year.

LG Copies Samsung, to Launch own NFT-enabled Smart TV

Following Samsung‘s plans to introduce Smart TVs with Non-fungible token (NFT) capabilities, another South Korean company, LG Electronics, has joined the trend. The company, one of Samsung’s Major competitors, has stated that it’ll be launching its own NFT tv.

LG Announces Plan for a NFT TV

The announcement came a day after Samsung promised the same. The head of the home entertainment business division at LG, Park Hyung-se, stated that the company plans to include NFT features in its TV line. He further said that the latest LG TVs are optimized for that ability.

The day earlier, Samsung announced that its new smart TV would also include an NFT marketplace. This means that users will be able to buy, sell, and view NFTs right on their TV.

With the market position of both Samsung and LG in the TV and electronics market, this move is significant. Both companies are the biggest TV makers in the world, according to data from Statista. 

Thus, their decision to incorporate NFTs into their products will significantly impact the market.

The interest of leading players in NFT will only make other competitors consider it. It also means that more companies will be considering entering the space. All of these could be good for the digital asset market industry in general.

Smart TVs and NFTs

The promise of Smart TVs with NFT features is just another example of how far the sector has grown. Within a year, the NFT space has become a multi-billion dollar industry with more potential for growth

In addition, with big electronics companies like LG and Samsung launching smart TVs with NFT features, this will further make the space accessible to households meaning more adoption is on the way for the industry.

Several projects will also benefit from this development. Already, top NFT projects such as Crypto Punks and Bored Ape have gained a cult-like following. But there are still several emerging projects which will benefit immensely from this development. 

Play-to-earn platforms using NFTs such as Decentraland, Axie Infinity, SandBox, etc., could also benefit from this development. With NFT compatible Smart TVs, interaction with these ecosystems is set to take on a new dimension.

LG Electronics Fans Bemoan End of Era as Firm Exits Smartphone Business

By Joyce Lee and Heekyong Yang

SEOUL (Reuters) – Fans of LG Electronics smartphones rued the loss of more affordable Android-based devices after the South Korean tech company said on Monday it would quit the business, with some praising LG for the innovation it brought to the industry.

LG smartphone users in South Korea and the United States posted nostalgic tributes on social media after the firm announced the exit, citing a prolonged sales slump. LG still holds a roughly 10% share of the U.S. smartphone market, according to researcher Counterpoint, though its slice of the global pie is just 2%.

“Please release the Rollable phone before you die,” said one user on a 300,000 member-strong forum on Naver, South Korea’s largest online search portal, referring to LG’s latest expandable display https://www.cnet.com/news/lg-rollable-phone-makes-ces-2021-appearance-and-were-intrigued concept that the company flaunted at the CES trade show in January.

Fans fondly noted some of the company’s more unique designs, such as a T-shaped dual screen, as well as features including a double-tap to turn a screen on and off.

“LG has some of the best audio hardware of any phone,” Kim Dong-woon, who has used six LG smartphones, told Reuters. “It’s a shame that LG is withdrawing.”

Influential U.S. tech reviewers echoed the sentiments.

“LG were never perfect but in a world of boring slabs they delivered some of the most unique phone designs, ideas and features ever,” said YouTuber Austin Evans https://twitter.com/austinnotduncan/status/1378894062388797441 on Twitter.

LG, which had been making mobile phones for about a quarter of a century, ultimately fell behind rivals Apple Inc and Samsung Electronics Co Ltd, in part due to lacklustre marketing and slow software updates.

Its smartphone division logged nearly six years of losses, totalling roughly $4.5 billion by the end last year.

For all the fandom, some criticised the phones, saying the shutdown was inevitable.

“The writing has been on the wall for a long time … things didn’t improve,” said user cdegallo on Reddit.

(Reporting by Joyce Lee and Heekyong Yang in Seoul; Additional reporting by Shubham Kalia in Bengaluru; Editing by Sayantani Ghosh)

South Korea’s LG Becomes First Major Smartphone Brand to From Market

By Joyce Lee and Heekyong Yang

Its decision to pull out will leave its 10% share in North America, where it is the No. 3 brand, to be gobbled up by Samsung Electronics and Apple Inc with its domestic rival expected to have the edge.

“In the United States, LG has targeted mid-priced – if not ultra-low – models and that means Samsung, which has more mid-priced product lines than Apple, will be better able to attract LG users,” said Ko Eui-young, an analyst at Hi Investment & Securities.

LG’s smartphone division has logged nearly six years of losses totalling some $4.5 billion. Dropping out of the fiercely competitive sector would allow LG to focus on growth areas such as electric vehicle components, connected devices and smart homes, it said in a statement.

In better times, LG was early to market with a number of cell phone innovations including ultra-wide angle cameras and at its peak in 2013, it was the world’s third-largest smartphone manufacturer behind Samsung and Apple.

But later, its flagship models suffered from both software and hardware mishaps which combined with slower software updates saw the brand steadily slip in favour. Analysts have also criticised the company for lack of expertise in marketing compared to Chinese rivals.

While other well-known mobile brands such as Nokia, HTC and Blackberry have also fallen from lofty heights, they have yet to disappear completely.

LG’s current global share is only about 2%. It shipped 23 million phones last year which compares with 256 million for Samsung, according to research provider Counterpoint.

In addition to North America, it does have a sizeable presence in Latin America, where it ranks as the No. 5 brand.

While rival Chinese brands such as Oppo, Vivo and Xiaomi do not have much of a presence in the United States, in part due to frosty bilateral relations, their and Samsung’s low to mid-range product offerings are set to benefit from LG’s absence in Latin America, analysts said.

LG’s smartphone division, the smallest of its five divisions accounting for about 7% of revenue, is expected to be wound down by July 31.

In South Korea, the division’s employees will be moved to other LG Electronics businesses and affiliates, while elsewhere decisions on employment will be made at the local level.

Analysts said they were told in a conference call that LG plans to retain its 4G and 5G core technology patents as well as core R&D personnel, and will continue to develop communication technologies for 6G. It has yet to decide whether to license out such intellectual property in the future, they added.

LG will provide service support and software updates for customers of existing mobile products for a period of time which will vary by region, it added.

Talks to sell part of the business to Vietnam’s Vingroup fell through due to differences about terms, sources with knowledge of the matter have said.

LG Elec shares have risen about 7% since a January announcement that it was considering all options for the business.

(Reporting by Joyce Lee and Heekyong Yang; Editing by Edwina Gibbs)