South Korea is following the footstep of NewYork state Department of Financial Services (NYSDFS) by considering BitLicense as cryptocurrency Exchange approval system.
South Korea announcing Cryptocurrency Exchange approval system
New York employs BitLincese, means that it allows cryptocurrency trading only when they have a license. Similarly, the South Korean Government is introducing cryptocurrency exchange approval system. By doing so, South Korean may have found a middle way than to shut down the exchanges or to permit open trading completely.
According to Business Korea, one of the Government officials said on Feb 11,
“We are positively considering the adoption of an exchange approval system as the additional regulation on cryptocurrencies. We are most likely benchmark the model of the State of New York that gives selective permission.”
However, South Korea and China were looked into hasty headlines to shut down cryptocurrency exchange. Also, the restricted announcement by Ministry of Justice (MIJ) and Financial Service Commissions (FSC) last month has led market falloff sharply. Fortunately, the government has altered its plan after probing out the speculative reasons behind cryptocurrency trading.
No Need to regulate cryptocurrency market unless excessively overheated
BusinessKorea reads as,
The government thinks that it doesn’t need to regulate the virtual currency market unless it has become excessively overheated. In short, there is no need to use a hard-line policy, including a total ban on trading, as the speculation has subdued.
Skyrocketing price of cryptocurrency and restrictive cryptocurrency announcements are the collateral facts. For instance, a ban announcement will have an effect on the development of promising blockchain industry. Pointing towards the exchange approval system, Deputy Prime Minister and Minister of Strategy and Finance Kim Do-Yeon said,
The MOJ and the FSC to ban virtual currencies but are acceptable to approval systems as long as they strictly manage them like New York.
The final announcement isn’t expected until June.
Moreover, the final announcement may not come until June due to a local election. Not only ban but approval system will also significantly affect the market.
Even approval systems will greatly affect the market, so it is a burden to announce them before local elections. When the government announced to close down exchanges last month, an approval rating for the government decreased as well. Some say that International Monetary Fund (IMF) and G20 will have an international discussion about cryptocurrencies, so it is not too late to come up with measures after the debate.
Few also expect tax imposition instead of additional regulations. Unlike other countries where skepticism whether to ban cryptocurrency/ introduce new trading regulations or to impose a tax, India Government has alarmed taxing ring on cryptocurrency earning.
An official from South Korean Government says;
“Some even say that the government should impose taxes instead of putting additional regulations if the market volatility remains same at the current level. We will hold a meeting to respond to national petition related to digital currencies this month, but we are highly likely to make up for the defects of existing measures only at the meeting.”