Bitcoin is turning a decade by next year. And despite the popularity of cryptocurrencies today, it is undeniable that it is still in its early stages. In fact, many regulators are still confused on what to do with cryptocurrencies. For instance, you have India’s stance to stop banks from transacting with cryptocurrency exchanges. Also, you have the likes of China that have imposed a ban on crypto-related activities.
In Asia, South Korea has embraced cryptocurrencies. In fact, Kimchi Price pertains to the higher price on cryptocurrencies when you buy cryptos on South Korean exchanges. Recently, South Korean regulators solidified the country’s pro-crypto stance.
South Korea’s Financial Supervisory Service on May 19 agreed that they should apply the G20 unified regulations regarding cryptocurrencies. According to regulators, “It’s most certain that cryptocurrencies will be classified as assets and the main issue will be centered on how to regulate them properly under the unified frame that will be agreed upon between G20 nations. Given the current stance, this isn’t good, but we will step up efforts to improve things”.
And just after agreeing to apply changes in their regulations, the Financial Services Commission (FSC) revised the guidelines for the crypto exchange operators. An official mentioned that “The FSC made revisions to its rules to apply strengthened policies in order to prevent or detect money laundering and illegal activities because the regulator isn’t opposed to cryptocurrencies”.
Another official also mentioned that “establishing unified rules is a complicated issue given the broader range of assessments between government agencies. This is why the country needs close international cooperation as it is still in the early stages of fine-tuning guidelines”.
What it basically means is that the government is interested in encouraging the growth of the cryptocurrency market and the application of blockchain technology. However, it is important to note that the government is still taking a closer look at both safety and security. A trade ministry official mentioned that “any major reversal in policies is unlikely, but the government seems to believe a gradual shift in attitude toward crypto-based assets is needed. What regulators should do is figure out how to regulate them properly and prudently as Korea needs to put more emphasis on blockchain technology after obtaining knowhow and understanding of the possible flipside of cryptocurrency trading”.
Increase in Interest?
South Korea also recognized cryptocurrency exchanges as legal entities. And despite the hacking incidences, it has cemented the position of crypto exchanges in the local economy. Kim Byeong-yong mentioned that the adoption of cryptocurrencies is likely going to happen in the country. Kim explained that “Global banks predict that interest in cryptocurrencies will double. We believe an increase in adoption will come when crypto-assets can be used as actual currencies rather than just speculative investments”.
Did South Korea make the right move? Japan has been doing what it can in order to grow the crypto market while protecting the interest of its investors. The crypto exchanges now need to meet additional requirements by Japan before they can operate. Is this something that South Korea could also be working on considering the recent hacks on crypto exchanges?