South Korea has quickly become one of the central countries associated with Bitcoin trading. Various South Korean exchanges are thriving as we speak. While this ecosystem is booming, the nation’s regulators are trying to assert control. More specifically, following a meeting with the International Monetary Fund, the South Korean government plans to increase its supervision of cryptocurrency transactions. This is all part of a major financial reform package affecting the country in the years to come.
South Korean Regulators and Bitcoin
No one can deny South Korea has become an integral part of all Bitcoin trading activity as of late. Bithumb, Coinone, and Korbit are very popular exchanges when it comes to cryptocurrency. However, the country’s government is in the process of introducing nationwide financial reforms. After sitting down with the IMF to discuss opportunities and a plan of action, it appears the government’s next goal is to supervise cryptocurrency-related activities in the country.
This new step isn’t entirely surprising. The South Korean government has hinted at potentially regulating Bitcoin for several weeks now. Moreover, it was apparent something would need to change in the country from an economic point of view. The meeting with the IMF took place in part due to a desire to improve labor productivity. Additionally, regulatory reform is direly needed in a lot of countries, including South Korea. The topic of Bitcoin regulation was touched upon as well.
Although not everyone is a fan of Bitcoin regulation, the outcome doesn’t have to be negative by default. Fintech and digital currency are taking off in South Korea, yet the government needs to address potential risks at the same time. Maintaining a competitive financial marketplace is the number one priority for the country’s leadership right now. This seems to hint at potentially lenient regulation, even though a lot of details have yet to be worked out.
Supervising Bitcoin transactions is not necessarily something to grow concerned about right away. It is certainly possible local cryptocurrency exchanges will be required to go to additional lengths, perhaps including obtaining a license. We saw similar measures introduced in Japan not too long ago. Most exchanges there have already obtained their new licenses, and normal trading activity has resumed. It is possible South Korean regulators will take a similar approach, although nothing has been confirmed just yet.
Whether or not Bitcoin will gain the status of legal currency in South Korea also remains unknown for now. Government officials have already declared it to be an “axis of the economy in the financial sector”. That is a rather vague statement, although it’s one that sounds somewhat positive overall. Then again, there are other entities which recently stated that Bitcoin was not a monetary or financial product. It is evident that opinions are still very much divided on this front right now.
South Korea is a critical nation for Bitcoin right now. Its government has to acknowledge that cryptocurrency-related activity is beneficial to the country’s economy. Whether or not this means we will see punishing restrictions or competitive regulations remains to be determined. An interesting future awaits Bitcoin in South Korea; that much is evident.