Ethereum price has been significantly on the rise during the last 12 months. Many factors may have contributed to this rise but no one can deny that 2 countries nowadays have a significant impact on both Ethereum price and the overall investor sentiment. These 2 countries are Japan and South Korea.
Earlier this year, our research team shared how South Korea in particular can have a huge impact on the future of Ethereum price. The Digital currency Bill the government passed back then, the amended foreign exchange transaction act and the Fintech friendly environment in the country made it clear that the country was setting up to become a major player in the Blockchain field.
South Korea ended up not only being a major player in the Blockchain and Cryptocurrency space, but a significant buyer of Ethereum as shown by the illustration below representing a snapshot of the daily ETH volume by currency. The picture has been similar since the summer.
The other country that’s playing a leading role in the Cryptocurrency ecosystem is Japan. Japan has declared Bitcoin as a store of value and currency in the first half of 2017. They also set it up so crypto miners can benefit from transferring their operations to Japan especially after China’s crackdown on Cryptocurrencies.
Ethereum Price and The Japan South Korea Collaboration
What’s happening now is that these two countries are joining together to move on to the next level of adoption. This move includes the sharing of knowledge to encourage a wider adoption of Cryptocurrencies but will also include regulating the Cryptocurrency space. That means changes are coming in 2 of the largest Crypto markets.
The collaboration is led by the Korean Blockchain Open Forum and Japan’s Blockchain Collaborative Consortium, BCCC.
So far, from the Korean side, the regulations seem to include changes to the issuance of the virtual accounts investors need to be able to trade in the Korean Crypto exchanges. These virtual accounts are issued by Korean banks to exchanges who transfer their ownership to their clients. Eventually this structure will have to change or new sets of identification rules will have to be defined since the government wants to no longer allow foreigners and minors to access these accounts.
Some additional regulations will be specific to Exchanges (Frozen funds to be held by exchanges…), taxation, anti-crime and money laundering measures.
As for the impact on Ethereum price and cryptocurrencies in general, these regulation discussions might cause investors to be cautious till there is a clear direction. Therefore, we might see a short term impact on transactions volume which will translate into a price correction.