Apparently, you can fight City Hall. The South Korean government in response to a petition signed by hundreds of thousands of locals tipped its hand toward cryptocurrency policy, and the outlook is much better than expected. While traders were gearing up for an all-out ban on cryptocurrency trading, it turns out they had nothing to sweat, as the South Korean government appears to be leaning toward green-lighting cryptocurrency exchanges.
Rather than take the approach of China, a relationship that is on the mend, South Korea has opted to make transparency a key focus of cryptocurrency trading in the spirit of “fostering blockchain technology.” It’s a testament to what a concerted effort among a country’s population can do, particularly in a government system that’s willing to listen.
On one hand, the South Korean government views bitcoin, trading and blockchain closely linked but they also view them through separate silos. Policymakers are focused on cryptocurrency transactions.
“I can assure you that the government has consistently maintained a close and careful approach to market conditions and international trends, keeping all possible means open,” according to Hong Nam-ki, minister of the office for government policy coordination, in a statement.
The South Korean government is also promising a swift response to any illicit trading activity in cryptocurrencies. “It is the basic policy of the government to prevent illegal acts and opacity in the process of virtual currency transactions,” the statement read.
Last month, the South Korean government said it intended to “curb speculation,” the first step in which appeared to be to shuttering exchanges. In addition to triggering a spiral in the bitcoin price at the time, the warning also inspired a backlash from citizens, as evidenced by a petition signed by nearly 300,000 residents objecting to the ban and pleading with the government not to make “unfair regulations on virtual currencies.”
The petition made its way to President Moon Jae-in via the Blue House website, as the president’s approval rating fell alongside the bitcoin price at the time.
While policymakers around the world continue to wrestle with varying opinions and numerous facets of the cryptocurrency market, one thing is clear — South Korea is a key market for bitcoin trading. The government’s position to seemingly accept cryptocurrency trading is a win not only for the country but for the cryptocurrency community at large.
South Korean policymakers have taken some measures, such as banning cryptocurrency trading from anonymous accounts and they also plan to implement a tax on the digital assets. But these steps are more reasonable than an all-out ban.
South Korean bitcoin trading volume reached greater than 12% of the total combined BTC trading in recent months, as per CryptoCompare data cited in CNBC.