Is Bitcoin going crazy in South Korea?
Korea has been one of the countries that have shown consistent support towards cryptocurrencies. Despite the rising number of countries who decided to stop supporting cryptocurrencies, Korea stood firmly beside cryptocurrencies. Well, efforts paid as Bitcoin proves its resiliency even until today. Bitcoin continues to break its record over and over. Bitcoin continues to record new all-time highs, making China and Russia go back to embracing cryptocurrencies.
Now, reports are showing that Bitcoin is rising in South Korea. Why and how?
Hundreds of thousands of South Korean investors have started to invest in Bitcoin and the cryptocurrency market, fueling a sudden increase in demand.
Demand for Bitcoin and other cryptocurrencies surge in South Korea
The exponential growth rate of the South Korean cryptocurrency exchange market has reached to a point in which South Korea’s prime minister Lee Nak-yeon and deputy prime minister Kim Dong-yeon, who also operates as the minister of strategy and finance, have released public statements in regards to potential policies that will be imposed in the short-term to regulate the South Korean cryptocurrency market.
In an interview with Nathaniel Poppers of the New York Times, Korbit founder and CEO Tony Lyu stated that in the South Korean finance market, if the popularity of an asset spikes and a few people are invested in it, the vast majority of the market and investors rush to invest in that particular asset, in a desperate attempt to follow the trend.
“Word just spreads really fast in Korea. Once people are invested, they want everyone else to join the party. There’s been this huge, almost a community movement around this.”
Such mindset of the majority of investors in the South Korean finance and cryptocurrency markets have led to a surge in cryptocurrency trading activities. In August, the daily trading volume of South Korea’s largest cryptocurrency exchange Bithumb surpassed that of KOSDAQ, the country’s leading stock market.
South Korean deputy prime minister Kim also emphasized that investor and consumer protection will need to be implemented by the end of 2018, given that investors of all ages have started to invest in the cryptocurrency.
South Korean government plan regulations by 2018’s end
Previously, the South Korean government and its financial regulators were hesitant toward regulating the local cryptocurrency market, because doing so would provide legitimacy to the market. However, earlier this month, the South Korean government decided to regulate the market, considering the exponential increase in the demand for the cryptocurrency market.
Chosun, a South Korean mainstream media outlet, reported that South Korean Ministry of Strategy and Finance, Ministry of Justice, Financial Services Commission, Fair Trade Commission and Financial Supervisory Commission have created a cryptocurrency task force to investigate into various aspects of the cryptocurrency market the government will be able to regulate in the short-term.
One of the spokespersons of the task force told Chosun that the South Korean government intends to follow the regulatory frameworks and roadmaps integrated by leading economies and Bitcoin markets such as Japan and the US.
“The South Korean government has no other choice but to follow the regulatory frameworks and trends established by other leading governments. While there certainly exists a negative reputation attached to the cryptocurrencies, the government’s stance is to allow what has to be allowed, for the benefit of the South Korean market.”
Thomas Glucksmann, Hong Kong-based head of marketing at cryptocurrency exchange Gatecoin. Further noted that considering the South Korean Bitcoin exchange market’s daily trading volume and size, regulatory frameworks by the South Korean government are necessary for the market and industry to grow. Glucksmann added:
“Given the size of the market, there’s a greater need for them to come up with something soon.”