The government has decided to significantly increase the monthly purchase limit for local currency (community love gift certificates) from the current 700,000 won to 2 million won. With the supplementary budget being organized twice this year, the annual issuance of local currency is expected to increase to a historic high of 29 trillion won, intended to revitalize the sluggish economy through consumer stimulation.

According to the government, the Ministry of the Interior and Safety finalized the 'Revised Guidelines for Local Currency Operation' on the 20th. These guidelines serve as a framework for local currencies operated by each municipality, allowing local governments to autonomously issue local currency within the previously expanded purchase limit of up to 2 million won.

A notice regarding local currency payment is posted in a store at the World Cup Market in Mapo-gu, Seoul./Courtesy of News1

Until now, the purchase limit per person was 700,000 won per month (1 million won was temporarily allowed during holidays). However, the limit of 700,000 won will remain for paper (physical) local currency, which has a high potential for misuse such as 'cash conversion' of gift certificates.

The Ministry of the Interior and Safety noted, 'There were requests from local governments to raise the local currency purchase limit, and this decision was made to promote local consumption and revitalize the domestic economy,' adding, 'Consideration was given to the fact that the domestic easy payment limit is 2 million won.'

In areas without markets, supermarkets, or convenience stores, local currency can now also be used at NongHyup Hanaro Mart. Previously, the use of local currency was restricted in stores with annual sales exceeding 3 billion won, and now NongHyup Hanaro Mart is included in this.

Earlier, on the 19th, the government included a budget of 600 billion won for local currency national government support in the second supplementary budget of approximately 20 trillion won. Including the 400 billion won secured from the first supplementary budget, the total budget for local currency national support this year is 1 trillion won. As the national government support budget increases, the issuance of local currency this year is expected to reach a historic high of 29 trillion won.

Local currency is a gift certificate issued autonomously by local governments to increase consumption within a certain area, supplied at a price discounted by 5-10% from its face value. While the expected effect of stimulating consumption is promising, some concerns have been raised that it could stimulate inflation.