In a video statement posted on South Korea’s presidential website, minister of the Office for Government Policy Coordination Hong Nam-ki clarified the government’s position on cryptocurrency regulation. South Korea’s main aim is to make cryptocurrency more transparent as opposed to banning trading altogether.
The announcement was released following a petition protesting a government proposal to shut down exchanges back in December. The petition, which was launched in January, reached over 200,000 signatures, the number required to receive an official government response. The public uproar forced the government to reconsider its firm grip on cryptocurrency regulation.
Given that South Korea accounts for a large volume of cryptocurrency trading, many traders are constantly concerned about the effects new regulation may have on the market. When news broke out that South Korea was prohibiting exchanges from opening new trading accounts, the price of Bitcoin fell 11%. This was at the time when Bitcoin had just experienced highs above $19,000. In January, the South Korean government banned anonymous crypto trading, a law that proved troublesome as many exchanges found it difficult to cope with.
By drafting and implementing such regulation, South Korea says it is taking steps to make cryptocurrency trading more transparent, thus making it safer for all. In the video statement available on the presidential website, Hong said the government’s goal is to ensure that all trading is done legally. Furthermore, Hong spoke about the government’s support for the development of blockchain technology. Hong elaborated:
“The government’s basic rule is to prevent any illegal acts or uncertainties regarding cryptocurrency trade, while eagerly nurturing blockchain technology.”
Hong also highlighted that there may still be many bumps on the road to come, adding that government divide is contributing to the somewhat drastic regulation regarding cryptocurrency.
“But, the government is still divided with many opinions ranging from an outright ban on cryptocurrency trading to bringing the institutions that handle the currency into the system.”
True to Hong’s statement, the government continues introducing various degrees of regulation. Earlier this week, Business Korea reported that South Korea was reviewing the possibility of establishing an exchange approval system similar to the “BitLicense” issued by New York. Mandatory approval would allow the government more supervision over crypto trading. Additionally, the government is considering implementing taxes on cryptocurrency as well as increasing the security of its exchanges. However, it is unlikely that any official decision will take place until June, following local elections in Korea.
While there may be more regulation on the horizon, the fact exchanges can continue to run in South Korea is a victory in itself. Perhaps more importantly, the government’s willingness to listen to its people indicates that the crypto market still has the potential to thrive.
