23.11.2020

South Korean Financial Watchdog Says Government will ‘Support’ Cryptocurrency Transactions

Choe’s remarks are a relief not only for traders but exchanges as well. Due to the government crackdown on illegal activity, many Korean banks hesitated to open virtual accounts for crypto traders. To help the situation, Choe stated the government will “encourage” banks to conduct transactions with cryptocurrency exchanges.

South Korean Financial Watchdog Says Government will ‘Support’ Cryptocurrency Transactions

According to coverage provided by Korean news outlet Yonhap, Choe Heung-sik, the head of South Korea’s Financial Supervisory Service, has announced that the government will support “normal transactions” of cryptocurrencies, particularly between banks and exchanges.

Over the course of the last few weeks, South Korea has been steadily softening its grip on cryptocurrency regulation. Toward the end of last year, the crypto market was slung into chaos when word broke out that South Korea was mulling over a total ban on cryptocurrency exchanges. A petition with over 200,000 signatures forced the Korean government to reconsider the ban, and last week the minister of the Office for Government Policy Coordination confirmed the government had no intention to prohibit trading.

Also reported by Yonhap is news of taxable revenue generated by cryptocurrencies. Government conducted research shows that Korean exchanges are “presumed to have reached 700 billion won (US$648 million) at the end of last year.” In addition, the report revealed Upbit to be the number one exchange in South Korea, with a market share of 52.9%.

Arthur Hayes, Chief Executive Officer of the peer-to-peer crypto-coin trading platform BitMEX, commented on the positive effect South Korea’s less stringent regulation is having on Bitcoin.

“South Korea did not ban Bitcoin,” he said, as reported by Bloomberg.

We’ve new gone up almost double in the last few weeks, and I think this is people coming around to the fact that Bitcoin trading isn’t going anywhere.

While it remains to be seen how the government will encourage partnership between exchanges and banks, the initiative appears to be well received by the public. Many anticipate the news will make a positive impact on the market as well.

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