South Korea Passes New Cryptocurrency Law

The National Assembly of South Korea recently passed a new legislation today that will provide a new framework for legalizing and regulating cryptocurrencies in the country.

Korean lawmakers vote unanimously

Korean lawmakers voted unanimously in the favor of an amendment to the financial services law. This amendment will now authorize the financial regulators of the country to supervise and monitor the country’s cryptocurrency industry. They will also be free to impose regulations related to anti-money laundering and other similar regulations on the industry.

South Korea is currently suffering because of the novel coronavirus (COVID-19) and the public health situation is deteriorating in the country. The unanimous vote presents a hopeful point of view of the legislatures who see a reasonable future in the crypto industry.

How does the Korean crypto industry fare?

South Korean crypto industry has suffered several hacks, controversies, and cycles of boom and bust ever since cryptocurrencies became popular here. It was not uncommon to find Bitcoin being sold at a considerable premium in the country. However, the technology is becoming very popular amongst users and adoption levels are high too. During the crypto boom of 2017, over a third of the country’s workers were invested in Bitcoin, Ethereum and other digital currencies. Interestingly, Seoul city even aimed to launch a cryptocurrency called S coin.

However, the government was broadly hawkish on digital currencies and tried to curb down the use of digital currencies. The government also introduced several new rules- like connecting accounts to real identities of users, to prevent misuse of this new technology.

With today’s legislative vote, the government has shown an accommodative stance on digital coins and blockchain technology. There is more focus on the use of cryptocurrencies for financial services. Kakao, one of the most powerful tech companies in the country, is heavily invested in blockchains and is boosting other businesses’ interest in the sector as well.

As soon as the crypto law is signed by President Moon Jae, the rules will be drafted within a month which will help existing companies transition into the new legislative structure. Note that Korean parliamentary elections are scheduled for mid-April. A majority of headlines is currently grabbed by coronavirus but it is likely that a push to the crypto industry could be useful in sending the right message to the country’s tech industry.