Korea, with a population of over 50 million, has a large remittance market. The most recent World Bank estimates show remittance inflows of $6.7 billion and outflows of more than $8.3 billion for Korea.
Korbit, the first bitcoin exchange in the country with 33,500 registered traders, is one of the top two exchanges by volume. Through its product called Hyphen, the company offers a service which helps businesses send payments to any bank account in 30 countries globally using bitcoin.
Bitcoin.com caught up with Tony Lyu, Korbit CEO, to discuss why Korea looks set for an explosive growth in Bitcoin adoption.
South Korea is Very Bitcoin-Friendly
Bitcoin.com (BC): Bitcoin can be easier bought in South Korea than most other countries. How did Korea become so Bitcoin-friendly?
Korbit (KB): Koreans are inherently familiar with virtual currencies. Korean gaming companies such as Nexon pioneered in-game virtual currencies in free-to-play games in the early 2000s. A major bank (KEB Bank) even created a virtual branch in a Korean social network (Cyworld) to provide banking services for the network’s digital token.
As such, Koreans have gone past the “if” phase of virtual currencies, and even the “when” phase, and is now at the “which” phase, as in, “which virtual currency is most useful for my needs?” For some use cases, Bitcoin is the answer.
Large and Growing Remittance Market
BC: Korea is consistently among the top countries for Bitcoin trading volumes worldwide. Can you explain how Bitcoin as a payment method has been growing?
KB: Bitcoin for merchant payments has not yet taken off in Korea, probably because alternative methods of electronic payment are already widespread.
Bitcoin for international remittances, however, is popular. I believe this use case has been a significant driver for the growth in trading volume in Korea.
BC: Do many people use your service for remittances?
KB: Yes, we see a lot of expat workers signing up to Korbit to take advantage of bitcoin for international transactions. They can be English teachers from developed countries such as the US, or migrant workers from developing countries such as the Philippines.
Remittance companies are also using bitcoin in the back-end of their services. So, many customers in Korea are using bitcoin and benefiting from it without even being aware of it.
Bitcoin has already taken a significant market share for some remittance corridors originating from South Korea. An article on Quartz estimated that 20% of Korea-to-Philippines remittance volume is settled in Bitcoin.
Why Adoption Should Spike
BC: How fast do you expect Bitcoin adoption in Korea to grow going forward?
KB: I expect Korean bitcoin adoption to outpace that of most other countries this year, as the Korean government introduces bitcoin exchange licensing regulations and clarifies the regulatory status of bitcoin-based cross-border remittances.
I expect Korean bitcoin adoption to outpace that of most other countries this year.
BC: Can you describe the South Korean government’s stance on bitcoin? Are they more accepting of bitcoin than most other governments? What reasons do they have to be open to bitcoin?
KB: Korea’s Financial Services Commission has said they will propose regulatory frameworks for Bitcoin-based businesses this year. Many Korean technology companies are competitive globally, but few, if any, Korean financial companies can say the same.
Bitcoin provides a great opportunity for Korean fintech companies to compete in the global market without the disadvantage of being held back by Korea’s local currency. It seems like the Korean government recognizes this and is looking to support Korean Bitcoin companies venturing into the global market.
Which currencies do you think the Korean Won will surpass this year? Let us know in the comments section below.