South Korean cities cut local currency limits to share benefits amid inflation

As living costs soar, some local governments in South Korea's Gyeonggi Province are implementing a "benefit-splitting" strategy for their regional currencies. Faced with limited budgets and an overwhelming demand, municipalities are cutting individual monthly charging limits to allow more residents to access the benefits.

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The monthly charging limit has been adjusted to allow more citizens to receive benefits as budget is quickly depleted due to reduced national and provincial support and increasing users.

Previously, users could receive an 8-12% bonus when charging their local currency accounts, often on a first-come, first-served basis on the first day of each month. This led to intense competition, leaving many unable to secure the bonus. In response, Yongin City will reduce its monthly charging limit from 500,000 won to 300,000 won starting in August. This change, while lowering the maximum monthly incentive from 50,000 won to 30,000 won, aims to expand the number of beneficiaries from 37,000 to 67,000.

Other cities like Gwacheon and Anyang have already adopted similar measures, reducing their limits to 200,000 won from 300,000 won. Public reaction is divided. Some residents express frustration over the reduced personal financial relief during difficult economic times. However, others see it as a fairer system, providing opportunities to those who previously struggled to access the currency due to the "open run" phenomenon.

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It's disappointing to have the practical living cost benefits reduced in these difficult times of high inflation.

The issue highlights a broader supply shortage across Gyeonggi Province. As of late July, 20 out of 31 cities and counties had already exhausted their incentive budgets for the month. The demand for regional currencies, which offer around a 10% discount, has surged due to rising costs for dining out and private education, areas where over half of the province's regional currency was spent last year. This has led to tens of thousands of users flooding charging apps at the start of each month, quickly depleting available funds in densely populated cities like Suwon and Hwaseong.

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It's fairer now because people who couldn't even log in at the exact start time can now get a chance to charge.

To address the "lottery-like" charging process, some cities plan to improve their systems to ensure all users have an equal chance from the moment charging opens, rather than allowing pre-access to create queues. However, the fundamental issue of demand outstripping supply remains. Cities like Hwaseong and Suwon are hesitant to reduce incentives further due to potential public backlash, while grappling with budget constraints. Furthermore, significant disparities exist in the benefits offered across different municipalities, with some cities like Yeoncheon, which also provides a basic rural income, still having ample regional currency budget remaining, contrasting sharply with the struggles in more populous areas.

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We are trying every month simultaneously with my husband, but over 20,000 people are already waiting when charging opens at the exact hour, so we always fail.