South Korea has become a hotbed for cryptocurrency and blockchain technology startups. Just recently the Korea Exchange launched its Korea Startup Market (KSM) based on blockchain technology, provided by Korean blockchain startup Blocko. Furthermore, the Korean Financial Services Commission (FSC) plans on regulating virtual currencies like bitcoin in 2017.
South Korea Aims to Regulate Bitcoin in 2017
Korea’s financial regulator announced this past week that regulatory policies are coming to the region concerning digital currency exchanges. Bitcoin and the altcoin market have become very popular in Korea according to the publication Korea Joongang Daily. Due to the increase in use within the country, the FSC has created a specialized task force dedicated to cryptocurrency exchanges.
According to the FSC, The three most popular exchanges in Korea have processed between 1.5 trillion won ($1.3 billion) between 2015 and 2016. Currently, there really aren’t any formal regulations at the moment other than the Ministry of Science, ICT, and Future Planning. The FSC says virtual currency transactions have also increased by 6% as cryptocurrency exchanges become more widely used.
The FSC noted that the new rules would address illegal use of digital currencies. This means regulations will be provided to deter illicit activity through cryptocurrency exchanges. “Digital currency is often used for money laundering, drug trafficking and tax-related crimes since it is free from regulation,” the commission said. For instance, Korea Joongang Daily wrote the FSC has set policies limiting peer-to-peer lending services.
Korean Stock Exchange Utilizes Blockchain Technology
Another announcement coming out of Korea’s fintech space is the launch of the Korea Startup Market (KSM). The market will provide shares of early stage startups traded publicly using distributed ledger tech. The startup Blocko will facilitate its blockchain-based protocol to enhance identity authentication.
“This is the first example of commercialization in which blockchain is applied to the Korean over-the-counter stock market,” founder and CEO of Blocko, Won-Beom Kim explained. “We are striving to advance our product by partnering with Samsung SDS, CISCO, and others to apply blockchain to a wide range of industries in the future, beyond existing uses such as bonds, promissory notes and points within the financial sector.”
This past summer Blocko raised $1.3 million in a funding round led by the Samsung Venture Investment Corporation. The company claims to have the highest number of business references within the region with clientele such as Paygate, Coinstack, Korea’s JB Bank and others.
South Korea Focused on Financial Technology
Fintech operations are booming as many are reporting a promising future for the South Korean fintech industry. Last month The Korea Herald detailed the South Korean authorities are focused on spreading digital currency solutions. The government will give 3 trillion won ($2.65 billion) across three years towards financial technology. Yim Jong-yong, chairman of the Financial Services Commission, said:
The government will push for the systematization of digital currency on a full scale in tandem with a global trend in the U.S., Japan, and other countries.
Furthermore, the South Korean Shinhan Bank announced its cryptocurrency remittance app this month. The platform will utilize a bitcoin-based cross-border payment service for Korea and China. Over the past year, cryptocurrency and fintech solutions have been gaining significant ground within the South Korean borders. Many countries around the world are aiming to be leaders in this emerging economy.
What do you think about the rise of financial technology and cryptocurrency adoption in South Korea? Let us know in the comments below.
Images courtesy of Shutterstock, FSC, and Blocko websites.
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