In the wake of transformational trends put upon digital currency space in the country, South Korea’s government has officially proclaimed crypto exchanges as “asset exchange and brokerage” with blockchain platforms and networks being called “blockchain-based software supply and development business.” That being said, the republic has taken another step towards regulation of the niche and leading the way in the Fourth Industrial Revolution (4IR). The amendment is likely one of many measures intended to provide a framework for crypto in the country. Reportedly, even more bills will be submitted by South Korean legislators during a 10-days-long session, starting July, 13th.
Although South Korea accounts for nearly 20% of all Ether transactions in the world and ranks third in Bitcoin adoption among other nations, the government’s relationship with cryptocurrency space has undergone turbulent changes over the last year. After banning ICO in September 2017, South Korean legislators had been shutting down local cryptocurrency exchanges or allowing them to operate only under increased supervision. In January 2018, the government announced that it would be collecting a 22% corporate tax and a 2.2% local income tax from the local cryptocurrency exchanges. Later this year, the Office for Government Policy Coordination prohibited anonymous trading, proclaiming they “can’t let this abnormal situation of speculation go on any longer.” In March 2018, the government also banned its officials from holding and trading cryptocurrency. But after the newly appointed Korean Financial Service (FSS) Governor Yoon Suk-heun had taken office and stated that regulation should help the cryptocurrency market grow, the regulators started simplifying cryptocurrency investment rapidly.
In May, South Korea’s National Assembly proposed initial coin offerings (ICOs) to be legalized, reversing the blanket ban on ICOs issued in the country in September 2017. In June, the Ministry of Science and Technology (MSIT) together with the US State Department announced the countries would strengthen cooperation in advancing Fourth Industrial Revolution. The officials agreed to coordinate their information and communication technology (ICT) policy, as well as to strengthen bilateral cooperation on cybersecurity and privacy, recognizing that data is a key resource in the Fourth Industrial era. By and by, at the beginning of July, the South Korean government finally recognized crypto exchanges and launched the blockchain classification system.
The system mentioned touches on development and distribution of blockchain-based mobile game software as well as specific subcategories for blockchain-based cloud hosting services. Later in July, the full outline of the classification will be released in addition to a new portion of bills.
South Korea has a population of over 50 million with statistics saying, 31% of workers investing in Bitcoin, Ethereum, Bitcoin Cash and a wide array of cryptocurrencies and assets. The craze over crypto has spread so far that at one point in January it lifted prices in Korea 50% higher than those in America. Investors of all ages are starting to invest in Bitcoin and the cryptocurrency market, and the demand for the digital assets has reached a point where deemed regulations for cryptocurrency business and investors are necessary.