South Korea’s primary financial regulator is in discussions with counterparts in China and Japan toward the regulation of cryptocurrencies like bitcoin.
Speaking to reporters today, Korea’s Financial Services Commission (FSC) chairman Choi Jong-ku has revealed a meeting attended by vice finance ministers from South Korea, Japan and China to discuss strategies and ideas on regulating cryptocurrencies. The meeting, which took place in South Korea, will see the FSC “set up a detailed system of cooperation” with China and Japan, Choi was quoted by Yonhap as stating.
Korean authorities are addressing an “irrational” investment trend into cryptocurrencies by the public, the official claimed. A “fever of speculative investment in cryptocurrencies is ongoing,” Choi stated, pointedly adding: “However, cryptocurrencies are unable to play a role as a means of payment.”
The co-operation between the three nations is particularly notable as they make some of the world’s largest trading market for cryptocurrencies including bitcoin. While China’s central bank has effectively shuttered the local bitcoin industry, Korean authorities are engaging in their own ‘crackdown’ on anonymous cryptocurrency trading while Japan, in contrast, has passed legislation in April 2017 to acknowledge bitcoin as a legal method of payment.
A year ago – nearly to the day – China began its crackdown on its local cryptocurrency trading market by performing “on-site checks” of major bitcoin exchanges. The scrutiny led to a halt of bitcoin withdrawals across a number of exchanges. Four months later, withdrawals eventually resumed but the damage had been done. In early September, China’s central bank proceeded to ban all initial coin offerings and effectively shutter bitcoin exchanges. More recently, there are widespread rumors that China’s central bank is moving in to curtail bitcoin miners in the country, although such reports have been disputed.
South Korean authorities followed China’s cue in issuing its own ban on all initial coin offerings soon after in September 2017. More recently, the government issued a statement pushing for a ban on anonymous bitcoin trading in the country, weeks after Korea’s prime minister deemed the heightened appetite for cryptocurrencies among citizens as a “pathological phenomenon”.
Japan, meanwhile, has already enforced regulations and guidelines for cryptocurrency exchanges and the industry, after recognizing bitcoin as a legal method of payment in April 2017. Such is the adoption and acknowledgement of bitcoin that Japan’s biggest bank -notably an investor in a major Japanese bitcoin exchange – is preparing to offer the first-of-its-kind trust service to bitcoin adopters in the country.
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Last modified: May 20, 2020 9:13 PM UTC