Cryptocurrencies have impacted countries’ economies in various ways, where the domination by citizens of these unique asset has even generated discomfort in governments.
South Korea and its regulatory project
Such is the case of South Korea; this Asian country is considered one of the most important markets worldwide. That is why the impact of cryptocurrencies is quite essential for them.
This country’s government is constantly fighting against money laundering and illegal negotiations, which for them is one of the worst behaviors in society, which is why, given the increase in cryptographic operations, it is demanding that said operations not be anonymous.
At the beginning of June, the South Korean Financial Supervision Service began an arduous investigation into the exchange platforms, and payment gateways currently exist in the country for cryptocurrency operations.
The number of companies whose exchange platforms allow transactions with cryptocurrencies in the Asian country only adds up to a minimum of 6 of the almost 160 Exchange and payment platforms from which they demanded operational reports and plans.
What is the cause that drives the creation of crypto legal bases?
Since 2017, the use and management of cryptocurrencies in South Korea have gone from being a fashion to a growing trend, positioning it after the United States and Japan as the country with the most significant number of Bitcoin transactions.
Given this situation, the need arises for the Korean State to give a relevant pause to this type of operation to the point that the Digital Assets Committee is being created, which is expected to stop the digital financial sector temporarily. However, at the same time, it is being restructured, thus avoiding future inconveniences like that of Terra-Luna.
The notable concern has led the government of this country to create a bill where the Exchange of cryptocurrencies is prohibited because these financial instruments do not have any control or regulation.
The decentralized nature of digital currencies allows for generating relatively high income in the Korean territory due to the strong demand for these digital financial products.
More and more private and business users are joining this trend since they consider a different way for savings to be appreciated in short periods.
The state’s most significant concern is fraud or tax evasion since revenues are pretty high, which would mean a significant capital outflow for the form that cannot be reinvested in the nation through taxes.
Many experts agree with the constant suggestions that cryptocurrencies be regulated, now with more impetus, in response to the collapse of the Terra digital currency, where it shook not only the savings of its followers but also the domino effect it produced in the other cryptocurrencies and stablecoins.
The regulation and control of the cryptocurrency market are not very far away since the confidence of its followers is slightly fractured in the face of a downward trend that does not stop.
Although many expert crypto market analysts support a possible regulation, this decision would go against the essence that gave rise to cryptocurrencies, the fact of being decentralized.
Aspects included in the regulations.
After the drastic fall of Terra USD, the followers and critics of cryptocurrencies saw the need for someone to respond to the millionaire losses that originated.
That is when the protection of capital becomes essential, but let’s remember the crypto market and any other financial market with both traditional and digital assets always carries risks and opportunities.
The Financial Supervision Service of South Korea (FSS), together with the Financial Services Commission (FSC), are working hard to create a legal basis that allows regulating the activities carried out by both the payment gateways and the Exchange of Crypto assets.
The Main Exchanges of the Asian country have considered the proposal valid. They have offered all their disposition regarding the protection of investors.
Among the main factors that they want to regulate are the following:
- The selection process for newly listed digital assets
- Monitoring, controlling, and supervising the market and the transactions executed through payment gateways and Exchange.
- Evaluate the technologies in which digital assets are developed.
Financial market conditions are currently quite vulnerable; that is why the need arises in the various countries to establish the legal bases that allow some way to protect the users of cryptocurrencies.
However, it is a rather delicate issue since it goes against the principles for which cryptocurrencies were created.