South Korea Buzzing About Potential ICO Legalizationbr>
Cryptocurrency has been sending ripples throughout the global economy for quite a few years now. At first, it was an interesting topic defined by a specialty group of cryptocurrencies. Later, it turned into a craze as the unregulated exchange of altcoins was on the rise. Then in 2017, it was the year of the ICOs. And now during the summer of 2018, the cryptocurrency market is in a sharp decline. I have a friend who tells me that she is afraid to even look at her cryptocurrency portfolio. It has taken a downward spiral. But, I urge you to take a look at what is going on in South Korea.
This is the year the cryptocurrency market has started to take shape. Countries began realizing the existence of altcoins and went on to either ban their trade entirely or heavily regulate it. During this time, South Korea has turned itself into a cryptocurrency giant with an influence in the global crypto-market.
South Korea’s Position in the Cryptocurrency Market
South Korea may be small in size on the map – it is about ¼ of the size of California – but it is about 25% larger in population at 50 million people. By GDP standards, South Korea has the world’s 14th largest economy according to 2017 IMF statistics – more than Spain, Saudi Arabia, or Canada.
More recently, the country has had a significant footprint on the global market with its share of cryptocurrencies. It has the third largest cryptocurrency market, accounting for approximately 17% of the global trades in Ethereum. It has surpassed China, the United Kingdom, and many other large economies with its share of cryptocurrencies, falling only behind Japan and the US.
One may wonder how prevalent cryptocurrencies are in South Korea. Approximately one out of every ten earning individuals in South Korea has a stake in cryptocurrencies. It is not easy for global cryptocurrency exchanges to ignore South Korea. CoinMarketCap once tried to take down Korean exchanges. As a result, Ripple’s market cap saw a slash of nearly $20 billion.
Why the Cryptocurrency Craze in Korea
So why is South Korea such an active player in the cryptocurrency market? South Korea has been a low-barrier-to-entry when it comes to new technologies. South Korea was one of the first countries in the world to try the CDMA cell phone system. Its acceptance of HDTV standard was no different when it accepted the USA Standard for HDTV. What about the country’s internet speeds? According to a report by the State of the Internet published by Akamai Technologies, South Korea had the fastest average internet connection in the world at 28.6Mbit/s in 2017.
I grew up in Seoul, South Korea and moved to the US with my parents when I was 14. I remember we had nothing to live with other than with new technologies. I believe that the leaders of South Korea had realized early on that the country had to accept new ways of thinking, make new products, and export them to the world market. This motivation encouraged the country to strive for higher education and accept new technologies which has resulted in economic growth. This created Samsung, Hyundai and numerous other large companies in Korea. All of these conditions have contributed to a perfect stage for a strong cryptocurrency market in the country.
Korea and the Cryptocurrency Market Laws
South Korea demonstrated inconsistent policies when it came to cryptocurrency laws and regulations. For example in September 2017, the country enacted a complete ban on ICOs. China had already done the same. However, the ban never came into fruition. Instead, the country has been buzzing with the anticipation of ICO legalization in the coming times.
It appears that the South Korean government is now regulating ICOs and cryptocurrencies in favor of protecting crypto-investors. The government has already taken steps to include a ban that prevents minors and foreigners from opening cryptocurrency accounts. Furthermore, regulated ICOs and the cryptocurrency market will mean the implementation of strict Anti-Money Laundering as well as Know Your Customer policies.
In 2018, South Korea’s biggest cryptocurrency exchange, Bithumb, joined efforts with Korea Pay to make cryptocurrencies acceptable in nearly 8,000 businesses. There are reports that the Supreme Court of South Korea has recognized Bitcoin as an asset when asked if tax collectors could confiscate bitcoin as an asset. Recently, the Bank of Korea publicly announced that cryptocurrency investments in Korea pose no significant risk to South Korea’s financial market. Similarly, the Korean Financial Services Commission (FSC) confirmed that it is not opposed to cryptocurrencies because they do not pose a significant risk to the financial market. In addition, South Korean regulators have plans to introduce G20 summit resolutions to create standard regulations for the cryptocurrency industry.
It is my opinion that cryptocurrency will remain for the duration with more countries embracing regulations in favor of legitimate ICOs and exchanges that exercise KYC and AML. While there are rules to follow, the cryptocurrency industry will be active and will proliferate. This, in turn, will bring more taxes for the country and create more jobs. More countries will follow the success stories of South Korea. So, hold on to your cryptocurrency portfolio for the long haul. And ride out the waves.
Steve Kuh, CEO, Bonafi, Inc.; Bonafi (www.bonafi.io) is a blockchain-based solution which helps to aid brands and consumers in their fight against counterfeiters. The components of its system are: the application, the BONA tokens, blockchain, and the Crypto-Tag (trademarked) which work together to authenticate goods.