Cryptocurrencies can be considered still be considered a grey area for a lot of countries. In fact, Asia is considered a hub for cryptocurrencies, Disruptive as it may seem, Japan and South Korea are just some of the countries where Bitcoin and other cryptocurrencies are popular today.
As for South Korea, it has recently considered a soft ban on cryptocurrencies. However, if you will ask Yoon Suk-heun, the new governor of South Korea’s Financial Supervisory Service, he plans on easing regulations on digital currencies. He mentioned: “Regarding cryptocurrencies, there are some positive aspects”. Under his leadership, it becomes possible that cryptocurrency market is going to grow.
He mentioned that “The FSS will collaborate with the FSC when an inspection on policies and financial institutions has different configurations associated with different scopes. The FSC inspects policies, while FSS examines and supervises financial institutions but with the oversight of the FSC”.
A Professor of Economics
Before Yoon worked as the FSS chief, he used to teach at the Seoul University teaching economics. He also handled a number of other public positions including the head of a committee under FSC in charge of doing reforms. He also has experience working for FSC’s Financial Administration Innovation Committee.
Yoon is quite open-minded when it comes to the possibilities of blockchain tech. Many are expecting that there will be structural changes within the country’s regulatory framework. And most important of all, Yoon’s background isn’t bureaucratic which means that there is a chance that crypto rules could actually be more relaxed under his leadership.
Earlier this year, FSC made new regulations that banned anonymous cryptocurrency exchange accounts. This was an effort in order to stop money laundering and other criminal activities that opted to use cryptocurrencies in order to hide from authorities. The regulatory changes also stopped juveniles and non-resident foreigners from entering the market.
According to the vice president of Bithumb, Lee Jeong-ah, shortly after the ban, trading activity slowed down. From $3.7 billion, transactions plummeted to just $372 million.
In September 2017, South Korean regulators also clamped down on initial coin offerings mainly because of dangers of fraud. However, today, there are also lawmakers that are now looking to re-legalize ICOs for good.
South Korea Going Cashless?
Just how open is South Korea now to the idea of cryptos? South Korea’s Central bank is now conducting a study regarding the possibility of introducing a digital currency. According to the bank, “A taskforce has been studying the possibility of issuing CBDC (Central Bank Digital Currency) and how digital currencies will influence the country’s overall financial sector since January. We will announce updates on this issue by the end of June”.
There are countries that are now dabbling on the idea of cryptocurrencies. Venezuela and Russia both had the idea of using cryptocurrencies that are backed by assets. Though South Korea is still in its early stages, this idea is a possibility considering the growing trend by other countries.
Could this mean that regulators are now accepting cryptocurrencies? And what does it really mean for the market?