The world of cryptocurrency has its fair share of individuals who engage in criminal activity (just like in the world of fiat currency). A growing number of countries are slowly but surely learning to accept the fact that blockchain technology is here to stay. Governments can either learn to accept the changing face of fintech – or get left behind.
The government of South Korea learned to accept the use of blockchain technology, but applied very strong regulations for its use to mitigate its abuse by criminal elements.
South Korean government officials, at the recent “Deconomy” conference in Seoul, stated that it was time to re-evaluate the country’s regulations for the use of cryptocurrency and blockchain technology.
The current co-president of the 4th Industry Forum of the National Assembly, Song Hee-kyong, stated the following:
“The government has misunderstood the virtual currency and tried to meet the real currency standards, so there are various problems. The industry does not stand still while waiting for the regulatory sandbox authorization, so it is just like keeping it in the box.”
This statement is similar to the reaction of many governments around the world, with regards to the use of blockchain technology by its citizens. Governments attempt to regulate a technology that they are yet to fully understand.
South Korea’s National Policy Committee chairman, Min Byung-doo, stated that the original stringent regulations were put in place to safeguard the country’s economy against the first major infusion of cryptocurrencies and blockchain technology. He later acknowledged however that the cryptocurrency economy has matured over the years and that it was time to begin re-evaluating the tight reign of regulations that are currently applied onto cryptocurrencies.
The current policies that are being used to regulate cryptocurrencies in South Korea need to be updated in order to facilitate the proper growth of blockchain technology in the country’s overall financial sector.
Choung Byoung-gug, chairman of the Special Committee on the 4th Industrial Revolution of the National Assembly, however stated that government officials were cautious about applying new regulations, for fear of these new regulations inflicting negative effects on the current state of the cryptocurrency economy.
The policy changes will make South Korea a more favorable destination for startup companies to setup their ICOs for funding and trading, thereby facilitating growth in the country’s fintech sector.