South Korea is one of the Biggest adopters of Cryptocurrencies, specifically Bitcoin and Ethereum. Bithumb, Corbit and Coinone are the Top 3 largest exchanges in the country. Recently, the country has been taking some steps we believe will have a major impact on the future of Ethereum. We will discuss the Top 3 that stand out at the moment.
Action # 1 – The Digital Currency Bill
Following Japan’s footsteps, the South Korean parliament is currently working on the Electronic Financial Transaction Act amendment bill proposal to regulate the cryptocurrency market in Korea. This bill will provide a legal framework with a focus on protecting clients using Korean exchanges from fraud. The bill will likely present a structure to avoid tax evasion and ensure the government profits from this booming market.
If the bill gets approved (we would be surprised if it doesn’t), amendments will have to be made to the Electronic transaction act. This should not be a challenge for the South Korean exchanges in our opinion as they are already fairly regulated. For clients to be able to trade in these exchanges, they need to fill AML (anti money laundering) and KYC (Know your client) requirements before they can start trading.
Action # 2 – The amended South Korean Foreign Exchange Transactions Act
July the 18th was an important date for Cryptocurrencies in South Korea. That’s the date when the South Korean foreign exchange act was amended to allow small companies to offer international money transfers. The condition was that they register with the FSS (Financial Supervisory Service). This is great news for the demand of Ethereum as this type of transactions was “illegal” in South Korea prior to July’s amendment.
Action # 3 – The local government is very supportive of the Fintech industry
Since 2016, the South Korean Government has been very supportive of the Fintech industry. Government funding, the opening of a Fintech support center acting as an information and networking hub are just some of the initiatives supporting this sector.
To conclude our article, we believe the initiatives mentioned above are going to have a substantial impact on Cryptocurrencies in general and Ethereum in particular. The demand will boom (similar to what we saw happening in Japan once the new regulations became official) and the Cryptocurrencies value as well.
Why do think this is going to be huge for Ethereum? Because South Koreans have a clear preference for Ethereum. The charts below show trading volume in South Korea’s largest exchange Bithumb. So if the steps taken by the South Korean government increase the demand on Cryptocurrencies, Ethereum will be the first Cryptocurrency to benefit.