Since early February, the crypto market has endured the third-worst correction in its history, experiencing a 78 percent decline in price. Despite the bear market, the cryptocurrency industry of South Korea has seen significant progress pertaining to regulation and adoption.
Crypto Will Soon be a Legitimate Industry in South Korea
Due to the extreme volatility of the cryptocurrency market, the vast majority of investors in the global market have recently been focused on the short-term price trend and movements of major cryptocurrencies.
However, while the price of cryptocurrencies is an important metric that demonstrates the level of adoption of digital assets, it is equally crucial to acknowledge positive developments in the cryptocurrency sector.
Since June, the cryptocurrency market of South Korea has seen actual progress in digital asset-related regulation, primarily due to the increasing efforts of the government to implement practical regulatory frameworks for cryptocurrency and blockchain companies.
Local financial authorities and the Financial Services Commission (FSC), the main financial watchdog of South Korea, have focused on legitimizing the industry by recognizing cryptocurrencies as regulated financial institutions, placing them under the authority of the FSC.
Once the cryptocurrency and blockchain bill is passed by the Congress, every cryptocurrency exchange will be required by law to comply with the same security, internal management, and anti-money laundering (AML) policies local banks and financial institutions are required to remain in compliance with.
Authorities at the FSC emphasized that the bill, if passed, will effectively put an end to the “Kimchi Premium,” which has declined substantially since December of last year, and reduce cases of security breaches and hacking attacks.
A few government officials have asked the FSC to require exchanges to obtain insurance for their cryptocurrency holdings so that trading platforms can reimburse their clients if their funds are stolen in potential hacking attacks.
Blockchain Training and Regional Government Support
Last week, CCN reported that the government of South Korea is promoting blockchain training as a part of its efforts to bolster the fourth industrial revolution.
This week, South Korea has established its budget for blockchain development in 2019, at a trillion won, more than it has ever spent in the development and deployment of innovative technologies. The government has not spent such a large sum of capital on other technologies like artificial intelligence, virtual reality, and big data.
Following the enthusiasm demonstrated by the federal government, regional governments such as Busan, the second largest city in South Korea, have publicly disclosed their intent to create the next “Crypto Valley” in the country, attracting cryptocurrency exchanges, business, developers, and talents.
Jeju Island, a region in South Korea that has the authority to operate independently outside of the federal government, has also said that it intends to evolve the city into the next Malta, a haven for cryptocurrency and blockchain businesses.