News out of Seoul this week is set to deliver significant change not only to South Korea, but the Asian region, and the international community as a whole. The South Korean government is now set to support Bitcoin, and in doing so marks a substantial shift in its longstanding policy towards cryptocurrency.
Round and Round We Go
All four corners of the earth have seen cryptocurrency volatility, and this has often been mirrored in regulation, as the ‘knock on’ effect of bad news in the crypto world spurs a government to act. It’s no surprise given the boom of the Asian region as an economic powerhouse the same has been seen here.
Beijing effectively banning cryptocurrency exchanges in September 2017 drastically shrunk the People’s Republic of China’s global share of cryptocurrency wealth. Japan was a beneficiary of this.
Having adopted a crypto-friendly policy and welcoming with open arms cryptocurrency traders who had their doors shuttered by the Communist Party of China, Japan rode this wave to become the largest cryptocurrency market in the world. Seeing Yen account for 56.2% of Bitcoin trades by early 2018.
Yet, when it comes to naming crypto-friendly territories around the world, South Korea has been far down the batting order behind the likes of crypto-friendly nations Japan, Switzerland, the Netherlands, and Denmark.
Uncertainty in Seoul
Within this climate, Korea has had a hot and cold approach to cryptos. Just months ago, Seoul was taking steps to crack down on cryptocurrency in the nation of 51 million. Indeed, at the start of this year it seemed each month brought another huge headline with bad news out of Seoul.
Some of the ‘anti-crypto’ agenda was eventually walked back or softened, but collectively the message was loud and clear: If you’re looking to trade cryptos? South Korea is not your first choice.
But the past week has seen this change in a big way.
A New Line of Thought
In announcing it would establish the Financial Innovation Bureau – and do so with a desire to harness advanced technology and foster cryptocurrency development – Seoul has provided a strong signal it intends to turn the page on it’s prior approach to cryptocurrency. The timing of this announcement is notable.
It follows on the heels of the international Financial Stability Board’s surprising report that came out on July 16 backing Bitcoin. With the reporting contending cryptos don’t threaten the current financial system in the world.
Put simply, old money and new currency can exist in the same world. For Seoul, this assurance was another case for a shift from reluctant administration to the advocacy of cryptocurrency. Even so, while Korean crypto advocates will be happy, it won’t undo overnight the damage done, or make up for lost time within the domestic crypto industry.
Korea’s Tech Leadership
Ultimately, this latest chapter appears illustrative of a broader global trend. Governments may not wish to embrace cryptocurrency, but they cannot ignore it. If they can’t ignore it, they may as well reap benefit from it. Seoul’s latest move may not be convincing or a permanent vote of confidence for the local crypto industry, but it doesn’t need to be.
Provided it’s not ‘one step forward, two steps back’, it will still amount to progress. That’s something that can be cheered in Seoul, the South Korean nation, and far beyond its shores. Especially as South Korea has long been a leading example and advocate for technological progress. Within the crypto space, it appears the government is finally seeking a leadership role.