Reports have indicated that South Korea is possibly mulling a new licensing regime for cryptocurrency exchanges in a bid to regulate the country’s cryptocurrency exchanges.
It hasn’t been a month since South Korea said that some of the cryptocurrency exchanges in the country will be shuttered. The latest report points to a rather softer stance by the country, if the report turns out to be correct. The South Korean government believes that implementing such a system brings a notoriously volatile market into a more familiar institutional framework which can be more easily supervised. These recent statements are a dramatic reversal to an energetic crackdown on cryptocurrency exchanges last year.
According to Business Korea, the government is considering adopting a system similar to New York’s Bitlicense model. The New York system only allows exchanges that applied for a Bitlicense from the state department of financial services to trade cryptocurrency. New York requires detailed reporting regulations and a minimum capital requirement which has limited the number of firms and currencies that qualify.
The first mention of a ban by South Korea, one of the top cryptocurrency markets in the world, in December of 2017 caused Bitcoin to slide 18% in one day. Resulting in the chief of financial services commission to talk openly about shuttering cryptocurrency exchanges nationwide in a speech to parliament.
This recent reconsideration from the government comes as a great relief to investors both in the country and around the world as South Korea’s policies would affect the international cryptocurrency market.
It seems that the recent stabilization of Bitcoin’s value after it fell dramatically at the end of last year has convinced the government that a safely regulated market is viable.
Or maybe the government realized that an attempted ban on trading would drive cryptocurrency exchanges underground, taking them out of the tax revenue loop as well as alienating South Korea from the developing Blockchain technology expansion and all of the benefits that are sure to come with it.